Written By Babel, the Singapore-based cryptocurrency lender, has been granted a three-month extension for creditor protection by the High Court of Singapore. This comes as a relief to the company, which has been struggling with liquidity issues following the sudden drop in cryptocurrency prices earlier this year. The extension is expected to provide Babel with additional time to restructure its business and come up with a repayment plan for its creditors.
According to reports, Babel had sought creditor protection in March 2021 after its clients were unable to repay their loans due to the sharp decline in the value of cryptocurrencies. The company had been providing loans in cryptocurrencies, such as Bitcoin and Ethereum, to investors who wanted to hold their digital assets without selling them. However, the drop in prices led to a liquidity crisis, which prompted Babel to seek creditor protection.
The extension granted by the High Court of Singapore is a significant development for Babel, which has been working to resolve its financial troubles. The company has reportedly been in talks with potential investors and has also been exploring various restructuring options to turn its business around.
Commenting on the extension, Babel’s CEO, James Tan, said, “We are grateful to the High Court for granting us the extension. This gives us the breathing space we need to continue our restructuring efforts and to work towards a sustainable future for Babel.”
While the extension is good news for Babel, it also raises questions about the future of the cryptocurrency lending industry. The sector has been growing rapidly in recent years, with a number of platforms offering loans in cryptocurrencies to investors. However, the volatile nature of cryptocurrencies, which can experience sudden and significant price fluctuations, has raised concerns about the risks associated with these loans.
Some experts believe that the Babel case highlights the need for greater regulation in the cryptocurrency lending industry. “The Babel case is a warning for other crypto lenders to be more cautious,” said Tanvi Ratna, CEO of Policy 4.0, a blockchain policy advisory firm. “It also highlights the need for regulators to step in and provide guidelines for the sector.”
Others, however, argue that regulation could stifle innovation and growth in the sector. “Regulators need to strike a balance between protecting consumers and allowing the sector to grow and innovate,” said Richard Teng, CEO of the Financial Services Regulatory Authority at Abu Dhabi Global Market.
Despite the challenges facing the sector, many in the industry remain optimistic about its future. “The crypto lending industry is still in its early stages, and there is a lot of potential for growth and innovation,” said Daniel Kwak, CEO of Binance Singapore. “As the industry matures, we will see greater stability and more sophisticated products and services.”
In the meantime, Babel will continue to work towards resolving its financial troubles and restoring confidence in its business. The company has said that it is committed to repaying its creditors and that it is exploring all options to ensure that it can do so.
The extension granted by the High Court of Singapore is a positive development for Babel, but the cryptocurrency lending industry as a whole still faces significant challenges. As the sector continues to evolve, it will be important for regulators and industry players to work together to ensure that it can grow and innovate while also protecting consumers and maintaining stability.
