In June, it suddenly stopped all withdrawals of its users. Hong Kong Based cryptocurrency exchange Babel Finance suffered heavy losses due to risky transactions with client funds.
The Block According to the news by Babel Finance, during the aggressive price drops in the crypto markets in the past months, it has suffered a huge buy and sell failure. Because of this failure bitcoin and Ethereum in total on par $280 million loss the company that looking for ways to get their users back their money. To be specific, the company has taken about a quarter of a year as a result of the positions it took, especially during the period when Bitcoin fell rapidly from $ 30 thousand to $ 20 thousand in June. 8,000 Bitcoins and 56,000 EthereumHe liquidated it.
The reason behind this move of the company, which completely stopped users’ withdrawals in June, became clear with the liquidation news.
Research by The Block found that the team dealing with trading and positioning at Babel Finance was created by the company. not adequately supervised suggests. No risk management is applied by this department and no PnL (Profit and Loss) The lack of reporting is another critical point. In addition, the firm’s wallet management team will have access to the trading accounts of the trading team.unlimited amount of funds” is particularly emphasized.
This is not the first time Babel Finance has put clients’ funds at risk. Records leaked in October 2020 indicate that the firm used some user funds to maintain a Bitcoin position, and that year’s Black Thursday revealed that it faced potential liquidation risks during a market crash.
trying to get out of this difficult situation. Hong Kong-based stock marketAlthough it has made different loan applications, it has not yet reached a clear solution.