Sequoia China-Backed Crypto Financial Services Firm Hits $2 Billion Valuation

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babel financeA Hong Kong-based crypto lender and asset manager, has received $80 million from investors including crypto venture firms Dragonfly Capital and Circle Ventures, raising its valuation to $2 billion, four years after its inception.

Major investors in the round are Chinese tech-focused fund Generation Capital, US crypto private equity firm 10T Holdings as well as existing backers, including BAI Capital, the Asian investment arm of German media conglomerate Bertelsmann, Babel Finance said on Wednesday.
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Babel Finance, which set up a new office in Singapore last September, said it would use the capital for its global expansion plan. The startup said it will strengthen its compliance team and seek regulatory approvals in the jurisdictions it operates in. Babel Finance has applied for licenses in Hong Kong, Luxembourg, UK and has “professional qualifications in multiple jurisdictions,” the firm said.

“The crypto financial market is full of opportunities and hidden risks,” Dale Wang, co-founder and CEO of Babel Finance, said in a statement. “Retail markets and altcoins may have higher profit margins, but we are more focused on the long-term growth of the industry and aim to lead the way in institutional financial services and innovation.”

“Not only does this help address many of the uncertainties in the early stages of the industry, including regulatory and market uncertainties, it also protects our customers to the greatest extent possible,” he said.

Babel Finance sparked a wave of growing interest in cryptocurrencies last May, raising $40 million in a funding round led by venture capital firm Sequoia Capital China, US investment firm Tiger Global Management, Dragonfly Capital, BAI Capital and Bertelsmann.

However, its latest funding round comes as the crypto market struggles to recover from the spectacular collapse of TerraForm Labs’ algorithmic stablecoin. TeraUSD and its sister token Luna crashed to near-zero this month, causing a ripple effect in the crypto market, with more than 0 billion in assets wiped out in a matter of days.
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The crash has thrown many investors into the red and wiped out nearly $60 billion from the portfolios of the crypto industry’s wealthiest.

Babel Finance, which gives customers access to bitcoin, ether and stablecoins, said it poses no exposure to TeraUSD and Luna. The firm said all of its “counterparts are looking good” and that the debacle of Terra has not affected its business so far.

Founded in 2018, Babel Finance said it provides lending, asset management, brokerage and mining services to approximately 500 institutional clients. According to the firm, its core lending business lost $3 billion in outstanding loans and its derivatives trading service reached an average monthly volume of $800 million at the end of 2021, adding that these were the most updated figures it provided. could do.

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