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Babel Finance gambled away $280M in client funds

Crypto lender Babel Finance lost over $280 million of client funds in proprietary trading.

Source: Babel.Finance

Asian crypto lender Babel Finance lost over $280 million of client funds due to proprietary trading. The incident is part of a series of questionable events.

Large sums of BTC and ETH gambled away

According to a restructuring report, Babel Finance has lost 8,000 BTC and 56,000 ETH in proprietary trading with client funds. 

Incident joins ranks of questionable events

The struggling crypto lender hit the headlines only about a month ago when it halted the possibility of withdrawals at short notice. At the time, the reason given was “unusual liquidity pressure” in connection with the falling crypto market.

This is also not the first time Babel Finance has reportedly gambled with client funds. In October 2020, leaked footage indicated that the crypto lender had leveraged some client funds to hedge against default risks.


What happens next

Babel is now trying to raise hundreds of millions of dollars in debt and equity investments as part of its rescue plan. The news platform “The Block” obtained the restructuring proposal and first reported on Babel’s proprietary trading with client funds:

First, it seeks to convert $150 million of the biggest creditors’ debt to convertible bonds, per the deck. Additionally, it looks to raise $250 million to $300 million in convertible bonds and then secure a revolving credit of $200 million from creditors “for business restoration.” The plan, if successful, would turn Babel’s largest creditors into shareholders.

To date, Babel Finance has not issued a public statement or responded to enquiries from news platforms.


This article does not provide investment advice. Historical cryptocurrency data is not a guarantee of future market developments. The author may hold several of the cryptocurrencies mentioned in this article.

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