Crypto Firm Lost $300 Million, Is This The Last Straw To Regulation?

The calls for crypto regulation intensified as reports revealed that Babel Finance lost a huge sum to proprietary trading using customer funds. The Asian crypto platform that recently suspended its withdrawal lost over $280 million. According to a restructuring proposal, the platform lost over 8000 BTC and 56,000 ETH during June because of market volatility.

In a video published yesterday, the chairman of the Security and Exchange Commission, Gary Gensler, talked about the need of regulating crypto exchanges and platforms. The SEC is under a lot of pressure after millions of investors were affected by the series of crypto insolvencies during the bear market.

How Babel Lost Millions

On the 7th of June, 2022, BTC was trading at $31.3K and ETH was trading at $1,905. By the 19th of June, BTC and ETH had fallen down to $17.7K and $890 respectively. According to reports, this period of extreme volatility caused heavy losses and liquidity on unhedged positions held by Babel.

Following this, Babel failed to meet any margin calls and suspended its withdrawals. Babel has chalked up the losses to a single point of failure in the company. Babel claims that the rest of the company does not have similar issues.

Babel is not the first crypto platform to be accused. It was reported that Three Arrow Capital co-founder Zhu Su brought a yacht will the borrowed money. Celsius was also labeled as a Ponzi scheme by many after it suspended its withdrawals following a volatile period in the market.

Tightening Regulation Around Crypto Companies

In a video released yesterday, Gary Gensler takes shots at crypto platforms that continue to act in an erratic manner. He also called for regulation and explained the steps the SEC is poised to take. Gensler also took shots at market makers in the crypto ecosystem and called them a conflict of interest.

The SEC has been under tremendous pressure after millions of customers lost their crypto to bankrupt platforms. Pennsylvania senator Pat Toomey blasted the SEC for failing to protect the investors.

Recommended
Price Analysis

Best Crypto Presales To Invest In September 2025 – Top Upcoming Presale Tokens

Best Crypto AI Trading Bots In 2025

Top Meme Coins To Buy In September 2025

Nidhish Shanker

Nidhish is a technology enthusiast, whose aim is to find elegant technical solutions to solve some of society's biggest issues. He is a firm believer of decentralization and wants to work on the mainstream adoption of Blockchain.

Why trust CoinGape: CoinGape has covered the cryptocurrency industry since 2017, aiming to provide informative insights to our readers. Our journalists and analysts bring years of experience in market analysis and blockchain technology to ensure factual accuracy and balanced reporting. By following our Editorial Policy, our writers verify every source, fact-check each story, rely on reputable sources, and attribute quotes and media correctly. We also follow a rigorous Review Methodology when evaluating exchanges and tools. From emerging blockchain projects and coin launches to industry events and technical developments, we cover all facets of the digital asset space with unwavering commitment to timely, relevant information.

Investment disclaimer: The content reflects the author’s personal views and current market conditions. Please conduct your own research before investing in cryptocurrencies, as neither the author nor the publication is responsible for any financial losses.

Ad Disclosure: This site may feature sponsored content and affiliate links. All advertisements are clearly labeled, and ad partners have no influence over our editorial content.