![](https://procoinnews.com/wp-content/uploads/2022/07/Screen-Shot-2022-07-29-at-1.23.41-PM-1200x630.png)
Babel Finance In Huge Trouble—$280 Million Customer Funds LOST
• July 29, 2022 1:45 pm • CommentsLast month Babel Finance halted customer withdrawals…
The crypto lending firm was said to have a financially sound and solid fundamental operation; however, proprietary trading using customer funds seems to have caused massive issues for the lending platform.
According to sources, Babel lost roughly 8,000 BTC and 56,000 ETH through its propriety trading operation—all funds that belonged to customers and investors.
This proprietary trading division reportedly lacked proper risk management controls, had poor reporting standards, and was not producing profit & loss statements—a massive red flag.
Zipmex was the most notable example of a firm suffering from exposure to Babel, and also had to halt customer withdrawals in response.
It seems insane that a firm operating on the level that Babel was decided to shirk risk management and proper business practices.
Everyone knows that crypto markets are the most volatile in the world. Deciding to trade without risk management and proper accounting? That’s just deadly in any market environment, let alone one with the speed and dips of the crypto industry.
Here’s what everyone is saying:
JUST IN: Babel Finance allegedly lost $280 million after using customer funds to trade #Bitcoin and #Ethereum, The Block reports.
— Watcher.Guru (@WatcherGuru) July 29, 2022
🚨Crypto lender Babel Finance reportedly lost 8,000 $BTC trading customer funds🚨
— The Altcoin Hub (@TheAltcoinHub) July 29, 2022
The Block explains:
Orders from Babel’s proprietary trading team were “not supported by any term sheets and thus were not recorded in system.” Plus, the firm’s wallet management team “released uncapped amount of funds” to trading accounts operated by its proprietary trading team.
This is not the first time Babel Finance has reportedly played with customers’ funds.
Zipmex has become the latest victim of the ongoing crypto crash after running into liquidity problems that it blames on troubled crypto lenders Babel Finance and Celsius Network. https://t.co/PlSp1Ozptd pic.twitter.com/wBhypvGjk4
— Forbes (@Forbes) July 29, 2022
.@BabelFinance lost around $280 million after liquidating several trading accounts funded with customer deposits in June, according to a restructuring proposal deck. Reporting by @oknightcrypto.https://t.co/yrPzmTtyG8
— CoinDesk (@CoinDesk) July 29, 2022
Bitcoin Magazine had more:
Now, the company reportedly seeks to convert $150 million of creditor debt into convertible bonds to raise up to an additional $300 million through more convertible bonds, and to receive $200 million in revolving credit. If successful, the largest creditors of Babel will become shareholders.
Join the conversation!
We have no tolerance for comments containing violence, racism, profanity, vulgarity, doxing, or discourteous behavior. If a comment is spam, instead of replying to it please click the icon below and to the right of that comment. Thank you for partnering with us to maintain fruitful conversation.