Hong Kong-based crypto lender Babel Finance has filed an application for a moratorium in Singapore’s high court to protect it from further action from creditors for up to six months.
The Singapore Moratorium Applications are intended to allow the restructuring efforts made by Babel Finance in the past few months to come to fruition, the crypto lender said.
The applications were filed in the General Division of the High Court of the Republic of Singapore on Monday.
Babel Finance temporarily suspended withdrawals and redemption of crypto assets in June 2022, following the cryptocurrency market volatility. The move, according to the company, was aimed at stabilising its financial position and protecting the interest of its creditors and stakeholders.
In a statement, Babel Finance said it has received indications of interest for a new money investment to recapitalise its balance sheet and relaunch its business. It has also been engaging with creditors on a proposed restructuring plan.
The plan proposes repaying debts owed to creditors with revenue generated by a new decentralised finance project minting so-called “Babel Recovery Coins”, according to a document viewed by Bloomberg News ahead of Babel Finance’s official filing.
Flex Yang, a founder of Babel Finance, is among the investors providing capital for the recapitalisation and is expected to take on a leadership position in the relaunched business.
“The Restructuring Plan will be implemented via one or more schemes of arrangement in relevant jurisdictions, including Singapore,” Babel Finance said. It targets to file the scheme by June 2023.
Babel, which has 500 clients and limits itself to bitcoin, ethereum, and stablecoins, secured $80 million in a Series B funding round last year at a valuation of $2 billion.
Founded in 2018, Babel is primarily involved in crypto lending and trading for a select group of institutional clients, including crypto-native institutions, traditional financial institutions such as banks and investment funds, as well as ultra-high-net-worth accredited investors and family offices.
Its focus on institutional clients makes it unique compared with other crypto financial services platforms.