On the 25th of September, 2020, seven audio files appeared on the internet. These files seemed to be part of a longer in-person conversation between an unknown individual and one Del Wang, the co-founder of Babel, a Beijing-based crypto lending platform. These recordings suggested that Babel had leveraged some of the user funds in order to long Bitcoin, thus facing potential risks of defaulting during the Black Thursday market crash, back in March this year.
Big Plans Allegedly Revealed
The recordings have shown a small glimpse of the radical strategies that can be taken by the nascent crypto lending industry in order to manage their balance sheets. This further suggests that some practices done may be different than that of what a firm claims it does.
Initially, an anonymous twitter user had uploaded these audio files, doing it on the 25th of September, 2020, on Anchor.fm. However, Babel was quick to file complaints, which caused these audio files to quickly vanish from the platform. It wasn’t long, however, before this anonymous user opted to post it on Youtube, as well.
Trying TO Put Out The Flames
Unfortunately for Babel, several individuals with familiarity with the company had listened to these recordings. They spoke to Coindesk, and subsequently confirmed that it was, indeed, Wang speaking. As a nail in the coffin, this unknown individual speaking with Wang had addressed him in his full name in one of the audio files.
Babel had given Coindesk a written response about the matter, sent by one of its representatives. This representative claimed that the company wasn’t able to confirm the authenticity of these recordings. The reasons for this, is claims that it was “clearly” edited artificially, and was “fragmented.”
The representative refrained from commenting on the content of the recordings themselves, but claimed that the anonymous publisher’s accusations were baseless. Wang, of course, opted not to respond to questions of commenting about the recordings.
Escalating The Scandal
This anonymous twitter user, in turn, opted to post two longer recordings on the 30th of September, 2020. These two recordings contained the previous seven parts, and suggested that the conversations had occurred around the 20th of March, 2020.
Babel Finance was founded in Hong Kong back in 2018, with further operations based in China. From there, Babel had served as a crypto bank of the space, allowing for lending and saving products. One of its key money drivers was the difference between the lending and saving interests.