Babel Finance collapse — what creditors were owed and recovered (2022)

Babel Finance was a Hong Kong-headquartered crypto lender whose group was held through Cayman-incorporated Babel Holding Limited, with operating entities in Hong Kong, Singapore and the BVI. It suspended redemptions and withdrawals on 17 June 2022, citing liquidity pressure after the Terra collapse and the June market fall. Reporting later established that its proprietary trading desk had run an unhedged order-book deficit of about US$766 million using customer assets, including roughly US$280 million lost directly in proprietary trading; co-founder Wang Li was removed.

On 6 March 2023 Babel Holding and four affiliates — Babel Asia Asset Management, Babel Block, Moonalpha Financial Service and Shinar Trading Services — applied to the Singapore High Court for moratoria under section 64 of the Insolvency, Restructuring and Dissolution Act. Legal commentary on the applications put creditor claims at over US$1.5 billion worldwide; press reporting has variously described the debt as US$766 million or as much as US$800 million, which are different measures from the claim total.

The court granted three months' protection in April 2023 rather than the six sought, and extended it thereafter. The proposed scheme would pool the assets and liabilities of the whole group and issue creditors 'Babel Recovery Coins' redeemable from a sinking fund financed by disposals of private equity investments, a share of profits from a new holding company and litigation proceeds.

In Re Babel Holding Ltd [2023] SGHC 329, delivered 24 November 2023, the court gave leave to convene a single scheme meeting. No court record or company announcement confirming the vote, a sanction order or any distribution has been published since.