Singapore High Court dismissed a $5M claim against Babel Finance co-founder in the wake of the platform's 2023 collapse.
News ·
Singapore's High Court dismissed a US$5 million claim brought by Parastate Labs against Babel Finance co-founder Wang Li on September 1, finding no dishonest assistance or breach of fiduciary duty in the collapse of the cryptocurrency fund. Parastate had invested five million USDT into a Babel fund in March 2022 with an promised 8 percent return, with the capital held in a designated sub-account on the Deribit derivatives exchange.
The liquidation occurred in June 2022 as the cryptocurrency market deteriorated and Babel faced severe liquidity pressure. Deribit demanded Babel deposit 200 Bitcoin and 2,000 Ether hourly to cover margin shortfalls; after Babel made one deposit, the exchange began liquidating positions within an hour. Wang attempted to negotiate alternative arrangements, but Deribit consolidated and liquidated Babel's accounts, resulting in a deficit of approximately US$12.5 million and wiping out customer investments entirely.
The court determined Parastate was a sophisticated investor with no trust or fiduciary relationship over its funds, and found no misleading statements or personal benefit to Wang in the outcome. The judgment does not specify whether further appeals are possible or whether other creditor claims remain pending against Babel or its principals.