Babel Finance, a Hong-Kong based commercial crypto financial institution, has suffered massive losses in proprietary trading.

According to The Block, the firm suffered heavy losses, losing 8,000 $BTC and 56,000 $ETH, as reported in a propsal deck.

The Asian company is now seeking to convert millions in debt into equity, and raise more funds via a revolving credit facility. This is similar to BlockFi’s deal with Sam Bankman-Fried of FTX.

It follows an earlier announcement that Babel Finance had halted client withdrawals, citing “unusual liquidity pressures” as the key reason.

The firm reportedly suffered these loses when $BTC fell from 30k to 20k, and “unhedged positions … forced liquidation of multiple Trading Accounts”.

This is also not the first time Babel Finance has been in trouble, as it faced potential default risks in 2020. However, they were bailed out by the stablecoin issuer Tether, which extended margin call deadlines.

Babel Finance’s collapse has also created its own contagion, with the Thai-based crypto firm Zipmex currently suffering liquidity issues due to their default.

Also Read: Crypto Exchange Zipmex Files For Bankruptcy Protection In S’pore

[Editor’s Note: This article does not represent financial advice. Please do your research before investing.]

Featured Image Credit: Chain Debrief