Cryptocurrency lender Babel Finance suspends withdrawals as markets plunge
Hong Kong-based Babel Finance on Friday temporarily suspended withdrawals and redemptions of crypto assets, as the crypto lender scrambles to pay its customers following the recent slump in the digital currency market.
Cryptocurrency valuations have fallen in recent weeks as investors dump riskier assets in a rising rate environment, with bitcoin, which hit a record high of $69,000 in November, more than halving this year. Value lost.
“Recently, the crypto market has seen major volatility, and some institutions in the industry have experienced conductive risk events. Due to the current situation, Babel Finance is experiencing unusual liquidity pressures,” the company said. .
Crypto lenders collect crypto deposits from retail customers and reinvest them, announcing double-digit returns and attracting tens of billions of dollars in assets. However, due to the recent slowdown, lenders are unable to encash the assets of their clients.
Babel, which has 500 customers and limits itself to bitcoin, ethereum and stablecoins, raised $80 million last month in a funding round that was valued at $2 billion. It ended last year with a debt balance of $3 billion on its balance sheet.
Earlier this week, US-based retail crypto lending platform Celsius Network halted withdrawals and transfers between accounts to “stabilize liquidity” as redemptions increased due to the collapse of the cryptocurrency TeraUSD in May.