Crypto lending platform Babel Finance suspends withdrawals, citing ‘liquidity pressures’

Babel Finance has become the latest crypto lending platform to suspend redemptions and withdrawals, the Hong Kong-based company said in a statement. blog post Friday.

The firm said it is “facing unusual liquidity pressures” amid a crash in frontier cryptocurrency prices, citing the lack of available assets at hand as the basis for its decision. prevent customers from withdrawing money from their accounts.

“Recently, the crypto market has seen major swings, and some institutions in the industry have experienced conductive risk events,” Babel Finance said, in the announcement posted on its website.

It follows a similar move from the crypto lending platform Celsiuswho announced earlier this week that she prevent customers to withdraw or transfer their funds, as his positions in Lido Staked Ethereum (stETH) came under threat when stETH lost its peg at ETH. Ripple effects of stETH depegging continue to spread, with crypto hedge fund Three Arrows Capital (3AC) face questions know if it is insolvent.

Babel Finance said it was “in close communication with all related parties” regarding details of the steps it is taking to resolve the issue, as it tries to stabilize its finances and “protect [its] clients.”

Babel Tower

Less than a month ago, Babel Finance received a $2 billion valuation following an $80 million Series B funding round. In a statement Accompanying the news, the company billed itself as the “world’s leading provider of wholesale crypto financial services.”

At the end of 2021, the company had outstanding loans totaling $3 billion and had a monthly trading volume of $800 million in derivatives – financial contracts based on the value of an underlying asset. . He had also structured and traded over $20 billion in options products by that time.

Babel Finance has about 500 clients and serves a “select clientele,” according to its May press release. Since its Series A funding round in May 2021, the company has grown from 50 people to over 170 employees and opened a new office in Singapore. During this round of funding, it secured partnerships with companies such as Sequoia Capital China, Zoo Capital and Tiger Global Management.

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