Babel Finance

Babel Finance was a Hong Kong-based crypto financial services provider founded in 2018 that offered lending, asset management, and prime brokerage to institutional clients.¹²⁹ In May 2022, Babel Finance raised an $80 million Series B at a $2 billion valuation, but on June 17, 2022, it suspended withdrawals and redemptions citing 'unusual liquidity pressures'.¹²³⁵ The company entered restructuring and sought creditor protection, with reports indicating losses of about $280 million from unhedged proprietary trading positions.²¹⁶¹⁷

Timeline

Money raised

Babel Finance raised a $40 million Series A round in May 2021 led by Zoo Capital, Sequoia Capital China, Dragonfly Capital, BAI Capital, and Tiger Global Management.²⁷⁹ In May 2022, Babel Finance raised an $80 million Series B round at a $2 billion valuation, with investors including Jeneration Capital, 10T Holdings, Dragonfly Capital, BAI Capital, and Circle Ventures.^12910111215 Babel Finance had raised a total of $120 million in equity financing as of May 2022.¹⁹ At the end of 2021, Babel Finance reported an outstanding loan balance of over $3 billion and an average monthly trading volume of $800 million in derivatives.¹²⁹ Babel Finance reported losses of about $280 million of customer funds from unhedged proprietary trading positions in June 2022.²

Investors named in the sources: Jeneration Capital¹²⁹¹¹, 10T Holdings¹²⁹¹¹, Dragonfly Capital¹²⁹¹¹, BAI Capital¹²⁹¹¹, Circle Ventures¹²⁹¹¹, Zoo Capital²⁹, Sequoia Capital China²⁹, Tiger Global Management²⁹, Bertelsmann²⁹, HSG⁹.

What happened

Babel Finance was founded in Hong Kong in 2018 by Flex Yang and Del Wang, who came from traditional finance backgrounds.¹² The company initially targeted Chinese bitcoin miners, offering loans against bitcoin collateral so miners could cover expenses without selling their coins.² Babel Finance expanded into institutional crypto services including lending, asset management, prime brokerage, and derivatives strategies.¹²⁹ The company restricted its business to bitcoin, ethereum, and stablecoins, avoiding speculative tokens.¹² By early 2021, Babel Finance served more than 500 institutional clients and had roughly $2 billion in outstanding crypto loans.²⁹

In May 2021, Babel Finance raised a $40 million Series A round from investors including Zoo Capital, Sequoia Capital China, Dragonfly Capital, BAI Capital, and Tiger Global Management.²⁷⁹ The company grew its team from around 50 people to over 170 after the Series A.⁹¹¹ Babel Finance opened a new office in Singapore and applied for licenses in Hong Kong, Luxembourg, the United Kingdom, and other countries.¹¹¹ At the end of 2021, Babel Finance reported an outstanding loan balance of over $3 billion and an average monthly trading volume of $800 million in derivatives.¹²⁹ In May 2022, Babel Finance raised an $80 million Series B round at a $2 billion valuation, with investors including Jeneration Capital, 10T Holdings, Dragonfly Capital, BAI Capital, and Circle Ventures.^12910111215

The Series B round was announced on May 25, 2022, despite a downturn in cryptocurrency markets.¹²⁴ On June 17, 2022, Babel Finance suspended withdrawals and redemptions, citing 'unusual liquidity pressures'.²³⁵¹⁶ Babel Finance had been trading customer assets in proprietary accounts, and unhedged directional positions were liquidated when bitcoin fell from around $30,000 to $20,000 in a week.² Forced liquidations wiped out roughly 8,000 BTC and 56,000 ETH, a loss reported at about $280 million of customer funds.² The proprietary trading desk was not hedged, and the losses affected lending customers who could not withdraw.²

On June 20, 2022, Babel Finance announced it had reached preliminary agreements on the repayment period of some debts, easing short-term liquidity pressure.³ Babel Finance was in talks with large institutions about potential solutions including setting up a new entity to take over some debt.³ The company entered restructuring and sought extended creditor protection into 2023.² An investor, Parastate Labs, had invested five million USDT in a Babel fund in March 2022, with a promised return of at least 8% and a three-month lock-up.¹⁶ Parastate's investment was wiped out when Deribit liquidated Babel's accounts in June 2022.¹⁶

On September 1, 2026, the Singapore High Court dismissed Parastate's claim, finding no dishonest assistance or fiduciary breach by Wang Li.¹⁶¹⁸ The court found that Wang Li had attempted to prevent the liquidation of Babel's accounts on Deribit.¹⁶ The court ruled that Parastate was a sophisticated investor and had no trust or fiduciary rights over its investment.¹⁶ The court rejected Parastate's argument that Babel made misleading statements about its financial strength.¹⁶ Babel Finance's collapse was part of a wave of crypto lender failures in 2022, including Celsius and Voyager.²³⁵

The recovery process for Babel Finance clients has been slow and unsatisfying, according to a source.²

Legal outcomes

• filedParastate Labs filed a US$5 million claim against Babel Finance co-founder Wang Li, alleging dishonest assistance in breaches of trust and fiduciary duties.¹⁶
• dismissedThe Singapore High Court dismissed Parastate Labs' claim against Wang Li, finding no dishonest assistance or fiduciary breach.¹⁶¹⁸

Where the founders are now

Flex Yang was a co-founder of Babel Finance and served as CEO until October 2021.² Del Wang was a co-founder and CEO of Babel Finance.¹² Wang Li was a co-founder responsible for trading strategies and was sued by Parastate Labs, but the claim was dismissed.¹⁶

Sources

1. Crypto asset manager Babel Finance reaches $2B valuation, TechCrunch, 2022-05-25
2. Babel Finance, yespress.io
3. Distressed crypto lender Babel wins reprieve on debt repayments, The Business Times, 2022-06-20
4. Crypto Investing Shows Signs of Life With StarkWare, Babel Deals, news.bloomberglaw.com, 2022-05-25
5. Babel Finance suspends withdrawals and redemptions, Web3 is Going Just Great, Jun 17, 20
7. Global investment firms make debut in Asian cryptocurrency market, Nikkei Asia, 2021-05-10
9. Babel Finance Valuation, Funding & Investors | Multiples, multiples.vc, 5 days ago
10. Babel Finance bags $80m Series B at $2bn valuation, fintechfutures.com
11. Babel Finance Now Valued at US$2 Billion With US$80 Million Fundraise - Fintech Hong Kong, Fintech Hong Kong, 2022-05-27
12. Crypto lender Babel Finance valued at $2 billion after latest ..., reuters.com, May 25, 20
15. Babel Finance Valued at $2B After Latest Fundraise, blockworks.com
16. High Court rejects US$5m claim against Babel Finance co-founder over crypto fund collapse, The Straits Times, 2026-09-03
17. Singapore court extends Babel’s worldwide moratorium and anonymises creditor names, globalrestructuringreview.com, Apr 27, 20
18. High Court rejects US$5m claim against Babel Finance, TechFomo, 2026-09-03

How this case file was put together

Every statement on this page carries a numbered note, and every note points to a court record, a regulatory filing or a named publication in the list of sources. Each statement was checked against the text of the sources it cites before it was published: a figure, a date or a name the cited source does not contain was cut rather than kept. Allegations are shown as allegations, with their status at the time of the source (filed, charged, convicted, pleaded, settled, dismissed or pending). Quoted lessons are the words of the person or publication named with them, copied from the cited source; nothing here is our own opinion of why the company failed.

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