Babel Finance

Bankrupt

Lending · born 2018 · ✝ 2022

A Hong Kong lender that bet customer funds and lost ~$280M.

Babel Finance was a Hong Kong crypto lender that had raised at an $2B valuation months earlier. In the June 2022 crash it froze withdrawals, later revealing ~$280M in losses from proprietary trading with customer assets.

Peak: ~$2B valuation; ~$280M loss
Cause: Bankrupt
Year of death: 2022

☠️ Cause of death

Babel used client deposits for directional proprietary trades that blew up when the market fell, leaving it unable to meet redemptions. It entered restructuring and a debt-to-equity workout as confidence collapsed.

📓 Lessons left behind

—A lender trading customer funds is a hedge fund in disguise.
—A fresh unicorn valuation is no buffer against leverage.
—Withdrawal freezes are the first symptom, not the disease.

🌱 The idea that survived

Segregated, audited deposits

Survivors leaned on proof-of-reserves and segregation to show deposits weren't funding the house's own bets.

#lending#proprietary-trading#hong-kong#insolvency