Babel Finance Suspends Withdrawals, Citing 'Unusual Liquidity Pressures'
Babel Finance has responded to a market downturn by temporarily freezing withdrawals and redemptions.
Hong Kong-based crypto lender Babel Finance has suspended withdrawals and redemptions, according to an announcement on the company's website.
- "Babel Finance is facing unusual liquidity pressures," the statement reads, before alluding to major fluctuations in the market and "conductive risk events" among institutional market participants.
- Last month, Babel raised $80 million in a Series B round with a valuation of $2 billion.
- At the end of 2021, Babel Finance had an outstanding loan balance of over $3 billion, up from $2 billion the previous February. It averaged $800 million in monthly derivatives trading volume and had structured and traded over $20 billion in options products.
- On Thursday, rival staking platform Finblox made a similar decision, restricting withdrawals to $1,500 per month due to its connection with Three Arrows Capital.
- Three Arrows Capital has found itself at the center of insolvency speculation, with several leading exchanges liquidating the fund's positions, according to a report by The Block.
- The cryptocurrency market is at its lowest point since December 2020, with bitcoin (BTC) trading narrowly above $20,000 while ether (ETH) holds onto the psychological level of support at $1,000. The market has been hit by negative sentiment exacerbated by crypto lender Celsius halting withdrawals earlier this month.
- “Babel Finance is taking action to best protect the interests of our clients," a company spokesperson told CoinDesk. "We are in close communication with all related parties and will share updates in a timely manner."
UPDATE (June 17, 11:51 UTC): Added Babel's outstanding loan balance at end of 2021.
UPDATE (June 17, 12:49 UTC): Added Babel's statement.
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