Crypto Lender Babel Finance Freezes Withdrawals Amid Market Turmoil
Hong Kong-based crypto lender Babel Finance pauses withdrawals and redemptions due to severe liquidity pressures as the broader digital asset market experiences a major downturn.
Hong Kong-based crypto lender Babel Finance suspends all withdrawals and redemptions as it faces unusual liquidity pressures. The company blames major market fluctuations and conductive risk events among institutional participants for this sudden freeze. This move occurs despite Babel raising $80 million in a Series B round just last month at a $2 billion valuation.
The firm boasts an impressive financial footprint, carrying an outstanding loan balance of over $3 billion at the end of 2021 and handling massive derivatives and options trading volumes. However, Babel is not alone in its current struggles, as rival staking platform Finblox also restricts withdrawals due to its ties with Three Arrows Capital. The hedge fund currently faces widespread insolvency speculation as major exchanges liquidate its positions.
These institutional freezes happen during a brutal cryptocurrency market slump that pushes prices down to levels not seen since December 2020. Bitcoin trades narrowly above $20,000 while ether hovers around the $1,000 mark, driven down by pervasive negative sentiment following Celsius halting its own withdrawals earlier this month. A Babel Finance spokesperson states the company takes these actions to protect client interests and promises timely updates.