Babel Finance suspends withdrawals due to “unusual liquidity pressures” Babel Finance suspends withdrawals due to “unusual liquidity pressures”
The crypto finance provider is pausing withdrawals and redemptions in response to harsh market conditions.
2 min read
Updated: Jun. 18, 2022 at 3:49 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
As the crypto winter prolongs, its effects are rippling into different areas of the crypto ecosystem and forcing difficult decisions. Several crypto companies face liquidation risks, cutting their workforce and pausing user activities on their platforms to stay afloat.
The latest in a myriad of stoppages in operation is Babel Finance which served a public notice on June 17, 2022, to its users.
The notice carried information that fluctuations in the crypto market have resulted in the company “facing unusual liquidity pressures.” The company stated further that it is in close communication to ensure the protection of its customers.
As a result, “redemptions and withdrawals from Babel Finance products will be temporarily suspended,” the notice read. However, it assured that the resumption of the service would be notified separately without failing to say when.
@FatManTerra weighed in on the notice and claimed Babel is “currently facing nine-figure losses.”
A verified source has confirmed that Babel Finance, a large Chinese crypto management fund, is currently facing nine figure losses – Babel customers & counterparties, please pull out your capital for the time being if you are able to.
— FatMan (@FatManTerra) June 17, 2022
He tweeted that while Babel has not yet liquidated, the idea is considered.
The crypto finance provider raised $80 million in a new investment round in May, takings its valuation to $2 billion. Jeneration Capital, Circle Ventures, and 10T Holdings joined current investors Dragonfly Capital and BAI Capital in the investment round.
Crypto institutions taking hard hits
Several cryptocurrency companies have made public headlines as they struggle to guard against rapidly depleting valuation. Since the start of Q1 2022, the entire crypto market has plunged, which has seen major cryptocurrencies fall drastically.
As per a recent report, rival crypto service provider Finblox also issued a statement informing users of new restrictions on its platform, which includes a pause on rewards and a limit on daily withdrawals, owing to its connections with Three Arrows Capital.
Celsius, which had garnered the most attention, made a similar announcement on June 12 to pause withdrawals, swaps, and transfers.
Likewise, Three Arrows Capital is the subject of insolvency speculations amidst rumors of impending liquidation.
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Abdulrasaq Ariwoola
Abdulrasaq is a blockchain maximalist who believes that technology is necessary for the future we are heading to. He is an ardent researcher, and writer who uses his writings to inform about the prospects in the blockchain space. He spends his free time writing movie scripts and combing the corners of Quora.
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TerraClassicUSD
$0.02113
TerraUSD (UST) is a decentralized and algorithmic stablecoin on the Terra blockchain.
Celsius Network
Celsius Network is a bankrupt cryptocurrency lending company that was founded in 2017 and headquartered in Hoboken, New Jersey.
Three Arrows Capital
Three Arrows Capital (3AC), a Singapore-based crypto hedge fund, collapsed due to poor risk management, recklessness in dealing with business partners and a significant portion of greed.