Babel Finance, a Hong Kong-based crypto lending platform has moved to suspend withdrawals and redemptions, according to an announcement on the company’s website. This comes just days after crypto lender, Celsius announced it also suspended withdrawals alongside swap and transfer products.
The company announced the suspension in a statement which reads, “Babel Finance is facing unusual liquidity pressures,” before alluding to major fluctuations in the market and “conductive risk events” among institutional market participants.
This comes as a surprise to the cryptocurrency community at large as the platform was able to raise $80 million in a Series B round with a valuation of $2 billion, just last month.
What you should know
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 also has found itself at the centre 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 week. We saw the native token of Celsius lose over 50% of its value at the start of the week, however, on Tuesday, we saw a 756% rally in the price of CEL to an intraday high of $2.57 from 30 cents, according to data from FTX, due to some optimism as the platform began repaying some of its loans.
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