Cryptocurrency lender and asset manager Babel Finance reached a $2 billion valuation in a funding round announced shortly after the implosion of the TerraUSD algorithmic stablecoin shook markets.
Investors including Jeneration Capital and 10T Holdings, as well as existing shareholders Dragonfly Capital and BAI Capital, took part in the $80 million financing, Hong Kong-based Babel said in a statement Wednesday.
The company’s valuation is up fivefold from its last funding round a year ago.
Babel, which focuses on institutional clients and deals only in Bitcoin, Ether and stablecoins, pulled in money at a choppy time for crypto.
A Bloomberg index of cryptocurrencies is down almost 50 percent this year, and the collapse of Terra has prompted renewed calls from regulators and politicians worldwide for stricter oversight.
European Central Bank President Christine Lagarde said last week that cryptocurrencies are “based on nothing and should be regulated to steer people away from speculating on them with their life savings.”
Days earlier, the deputy governor for the UK’s central bank said some retail investors who have put money into digital currencies probably don’t understand exactly what they bought or the risks involved.
Babel Chief Executive Officer Del Wang said he’s willing to forgo the higher profit margins that come from servicing retail investors.
The firm’s focus on institutions “helps to overcome the many uncertainties in the early stage of the industry, including regulatory and market uncertainties,” he said in the statement.
Babel, which serves around 500 clients, said it will use the proceeds to hire more traders and expand its compliance team.
At the end of last year, it had an outstanding loan balance of more than $3 billion and was trading roughly an average $800 million in cryptocurrency derivatives a month, according to the release.