Cryptocurrency exchange Zipmex, which froze withdrawals on July 20, has shed new light on its battle with Babel as the firm desperately sought to recover £48 million dollars from the lender.
The recent Zipmex announcement indicates that mood music from Babel had previously assured the exchange that all liquidity issues could be resolved quickly and in a timely manner. This further led Zipmex to believe that there was no cause for concern.
A meeting of the two parties on the morning of July 20 flipped that notion on its head and instead revealed that “the path to resolution would be protracted, and may not be guaranteed.”
Zipmex informs Thai SEC
Following the meeting with Babel, Zipmex immediately reported the situation to the Securities and Exchange Commission in Thailand (SEC).
According to Zipmex, revelations from Babel on July 20 brought “a significant shift from the previous conversations.” This led them little other recourse to refer themselves, and their creditors, Babel and Celsius, to the regulator.
Previous disclosures have revealed that Zipmex lent Babel Finance $48 million and Celsius $5 million. Zipmex went on to explain prior to the recent events of crypto winter the financial history of these firms suggested they’d have little issue repaying their respective debts.
Zipmex said, “these parties were backed by extremely reputable investors.” Before going on to say, “Celsius Network raised over $750 million in funding by the end of their Series B round at the end of 2021. They started the round with an investment of $400 million. In total, Celsius Network raised funding of $864 million valuing the company at $3.5 billion.”
With regards to Babel, they added, “Babel Finance raised over $80 million in a Series B funding round in May 2022, bringing their total value to $2 billion.”
In both instances, however, this reasoning proved to be faulty. While Celsius and Babel both appear to have been very successful at raising money, neither was quite as adept at managing it.
A very heated crypto winter
Crypto winter may be here, but there remains plenty of heat in the atmosphere thanks to flaring tempers right around the cryptosphere. Zipmex and Babel are far from the only firms to butt heads.
Bancor and Celsius are among the corporations which suddenly fell out of favor with one another during the market downturn, with the former accusing the latter of being a “hostile antagonist against the Bancor protocol.”
Bancor even went as far as to say that Celsius was “creating short positions” and attempting to destabilize the project.
More generally the greatest sources of ire continue to be the very unstable stablecoin Terra and the disaster Venture Capital firm Three Arrows Capital (3AC). Both teams have a laundry list of angry parties to deal with after they were seemingly mismanaged into the ground.
In the case of 3AC founders Kyle Davies and Su Zhun the anger was so acute, the two men were forced to abscond from Singapore and go into hiding.
For some, crypto winter really is the hottest time of year.