Former CEO and founder of Babel Finance, Flex Yang, has announced that the Singapore court has withheld the company’s proposal to extend creditor protection. The court has asked for more clarity on the restructuring plan due to objections from creditor Deribit. Babel Finance had proposed to use revenue generated by a new decentralized finance project, the “Babel Recovery Coins”, to repay creditors. Deribit had requested that Alvarez & Marsal be appointed as an independent advisor to oversee the restructuring plan.
In June 2022, Babel Finance ceased withdrawals due to “unusual liquidity pressures” after the collapse of Terra Labs. On March 6, 2023, the company filed for a moratorium extension to prevent creditors from making claims for a period of time, allowing for the restructuring plan to come to fruition. Flex stated that Babel Finance owes over $750 million to creditors and that the current moratorium will end on April 5. An interim moratorium has been granted by the court until the next hearing date on April 17. Flex returned to scrutinize the company’s restructuring plans after being away from Babel Finance since 2021.