- Babel Finance suspended withdrawals and redemptions today, citing liquidity pressures as its reason for doing so.
- The firm did not say if or when it would resume services but said that it would provide a separate notification on this.
- Babel also alluded to other companies undergoing crises—most likely Celsius Network and Three Arrows Capital.
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Babel Finance, a Hong Kong-based cryptocurrency lending company, has announced that it is suspending withdrawals.
Babel Suspends Redemptions and Withdrawals
Babel wrote today that “redemptions and withdrawals from Babel Finance products will be temporarily suspended.”
The company cited “unusual liquidity pressures” as the reason for its decision to pause services, noting that the cryptocurrency market has seen “major fluctuations” of late.
Babel added that it is in “communication with all related parties” on actions that may affect them. Babel did not name those parties; however, it is known to work with various companies including Genesis Capital, Bitgo, and Blockchain.com.
The firm did not make it clear if or when services will be restored, but said that this will be indicated in a separate notification.
In May, Babel announced it had raised $80 million in a funding round, bringing its valuation to $2 billion. It reported 500 clients and an outstanding loan balance of $3 billion at that time.
Babel Alludes to Other Crypto Crises
Babel added that other crypto firms have seen “experienced conductive risk events” over the past several days.
Though Babel did not name those firms, it is likely referring to Three Arrows Capital, which has reportedly seen liquidations of $400 million from various companies. Those liquidations were likely carried out by Genesis Trading and BlockFi among others.
The firm may also be referring to Celsius Network, which paused customer withdrawals on Monday, June 13. Celsius saw massive withdrawals as a result of the collapse of TerraUSD, compelling it to suspend its services on that day.
Combined with the fact that Bitcoin is priced near $20,500—a low not seen since December 2020—these lending crises make it unlikely that the above firms will make a rapid recovery.
Disclosure: At the time of writing, the author of this piece owned BTC, ETH, and other cryptocurrencies.