Babel Finance has undergone severe loss as it executed proprietary trading with customer funds.
The Asian crypto lender has been in невоља and abruptly suspended client withdrawals from last month. This report comes from the company’s restructuring proposal deck.
Due to proprietary trading failure, the company lost more than $280 million in Bitcoin and Ether, according to the deck dated July 2022.
While in June, due to a heavy market downturn, Babel Finance specifically lost around 8,000 BTC and 56,000 ETH after facing liquidation.
„У тој нестабилној недељи у јуну када је БТЦ нагло пао са 30 на 20, незаштићене позиције на рачунима [власничког трговања] довели су до значајних губитака, директно доводећи до принудне ликвидације више налога за трговање и збрисали ~8,000 БТЦ и ~56,000 ЕТХ,“ чита шпил.
Following these heavy losses, Babel’s lending and trading departments have been unable to meet margin calls.
According to the deck, “conclusion: Single point of failure – The Proprietary Trading team’s failed operation falls outside of the company’s normal business which has otherwise been running smoothly with proper management and control.”
The Block said that Babel Finance describes its proprietary трговински business as “risky”, yet it failed to hedge its positions.
„Власнички трговачки тим управља неколико трговачких рачуна који нису под контролом или надгледањем од стране Одељења за трговину; за ове рачуне није спроведен никакав трговачки мандат или контрола ризика; није пријављен ПнЛ [добит и губитак]“, према шпилу.
Babel Finance has also reportedly played with customers’ funds in 2020.
According to a leaked recording, Babel Finance, in October 2020, leveraged some user funds to boost a bitcoin trade. Following that, the company face potential default risks during that year’s Black Thursday market crash.
However, as per the recordings, Tether reportedly stepped in to save Babel Finance at the time.
Извор слике: Схуттерстоцк
Source: https://blockchain.news/news/babel-finance-lost-more-than-280m-in-proprietary-trading-with-customer-funds