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Flex Yang’s Babel Finance Faces Creditor Protection Extension Refusal in Singapore Court

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According to reports, Flex Yang, the co founder of Babel Finance, said that after the objection of creditor Deribit, the Singapore court refused to make a clearer decision on Babel

Flex Yangs Babel Finance Faces Creditor Protection Extension Refusal in Singapore Court

According to reports, Flex Yang, the co founder of Babel Finance, said that after the objection of creditor Deribit, the Singapore court refused to make a clearer decision on Babel Finance’s request to extend creditor protection. Flex Yang stated that the court granted an interim Moratorium until the next hearing date of Babel Finance’s creditor protection request on April 17.

PayPal Finance creditor protection extension request is on hold

Babel Finance, a Chinese-based crypto lending platform co-founded by Flex Yang, is facing a potential financial setback after a Singaporean Court ruled against an application to extend creditor protection. The decision to deny the extension was made after objection from creditor Deribit, which claimed that Babel Finance was not eligible to apply for creditor protection in Singapore.

The Background of the Case

Babel Finance is a crypto lending platform founded in 2018 by Flex Yang, Del Wang, and Lei Tong. The company offers its clients the opportunity to borrow or lend cryptocurrency assets, such as Bitcoin, Ether, and stablecoins.
In January 2021, Babel Finance applied for creditor protection in Singapore following a breakdown in negotiations with some of its investors. The company argued that it was facing a liquidity problem that could lead to a severe financial crisis affecting all its stakeholders, including its clients.
The Singaporean Court granted Babel Finance an interim Moratorium, which offered the company a brief period of reprieve from its creditors while it sought to stabilize its operations. Babel Finance was then given until April 17, 2021, to convince the Court to extend the Moratorium, thus halting any claims from its creditors and buying the company more time to restructure its finances.

The Singaporean Court’s Decision

On April 9, 2021, the Singaporean Court refused to make a clear decision on Babel Finance’s application for an extension of its creditor protection. The Court’s ruling followed an objection by Deribit, a Bitcoin derivatives trading platform, that Babel Finance was not eligible to request creditor protection in Singapore.
Deribit’s counsel argued that Babel Finance was not incorporated in Singapore and had no legal standing to apply for such protection in the country. The counsel further stated that since Babel Finance’s mainstream business was located in mainland China, the Court lacked jurisdiction to hear the matter.
After hearing from both sides, the Court decided to grant an Interim Moratorium until the next hearing date for Babel Finance’s creditor protection application on April 17, 2021. The Interim Moratorium prevents the company’s creditors from taking any action against it until the next hearing date.

Analysis of the Implications of the Court’s Decision

The Singaporean Court’s decision not to extend Babel Finance’s creditor protection is a significant blow to the company’s attempts to salvage its finances. The decision means that the company’s creditors, including Deribit, can now seek redress for their claims against the company.
The ruling by the Court has also raised concerns about the future of crypto companies in Singapore. Some experts argue that if cryptocurrency companies cannot seek creditor protection in the country, it could lead to a shift in operations to other jurisdictions.
However, other analysts argue that the Singaporean Court’s decision is a reminder that companies should be transparent about their operations and should comply with local laws and regulations. Failure to do so can lead to severe financial and legal consequences.

Conclusion

In conclusion, the decision by the Singaporean Court to reject Babel Finance’s application for an extension of creditor protection highlights the importance of adhering to local laws and regulations. The Court’s decision serves as a reminder that companies operating in any jurisdiction should be transparent about their operations and should seek legal advice from experts.
Furthermore, the outcome of the Babel Finance case raises questions about the future of crypto companies in Singapore and highlights the need for clear regulatory frameworks to govern the industry.

FAQs

1. What is Babel Finance, and what services does it offer?
Babel Finance is a Chinese-based crypto lending platform founded in 2018. The company offers its clients the ability to borrow or lend cryptocurrency assets, such as Bitcoin, Ether, and stablecoins.
2. Why did Babel Finance apply for creditor protection in Singapore?
Babel Finance applied for creditor protection in Singapore in January 2021 after negotiations with some of its investors broke down. The company argued that it was facing a liquidity problem that could lead to a severe financial crisis affecting all its stakeholders.
3. What are the implications of the Singaporean Court’s decision on Babel Finance’s financial future?
The decision by the Singaporean Court not to extend Babel Finance’s creditor protection is a significant setback in the company’s attempts to salvage its finances. The ruling means that the company’s creditors can now seek redress for their claims against the company.

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