Losing 8,000 bitcoins and 56,000 ethers in one click: how Babel Finance played with its clients’ money

Not your keys, not your cheese – Before our amazed eyes, the centralized crypto lending platform Babel Finance has just made 8,000 bitcoins and 56,000 ethers disappear. A revelation that gives a partial explanation for the suspension of withdrawals decided last month. It is all the more worrying as it was client funds that were used for the trader.

The worst magic trick, the Tower of Babel

The shock wave linked to the LUNA crash and the bankruptcy of the 3AC Venture Capital fund continue to do damage. Or more precisely, the dust finally settles, before certain users of centralized finance appears a heap of ruin.

The leak emanates from a document formulating a restructuring proposal. Obtained by The Block, the document reports a loss of approximately $280 million in Bitcoin and Ethereum. The platform used its clients’ funds for traders on the markets.

“During that volatile week in June when BTC fell precipitously from $30 to $20,000, unhedged positions suffered large losses which forced the liquidation of several accounts, wiping out approximately 8,000 BTC and 56,000 ETH in the process”

Babel Finance restructuring proposal, quoted by The Block

The setbacks of centralized finance continue to agitate the column crushed investors. Item that sadly flourishes in the media at the end of each bullish cycle. Hence the importance of ensuring who keeps your funds. Whether you delegate them to a third party (not always trusted) or whether you opt for maximum sovereignty with a hardware wallet.

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