Babel Finance, a Hong Kong-based cryptocurrency lender, announced restricting withdrawals and redemptions on its website.
As per the notice,
“Due to the current situation, Babel Finance is facing unusual liquidity pressures.”
The team said they are in constant contact with all relevant parties on the steps they are doing to best safeguard their clients. According to the statement, redeeming and withdrawing from Babel Finance products will be temporarily halted at this time. As per the company, the return of regular service will be announced separately.
Babel Finance, founded in 2018, recently reached a valuation of $2 billion after series B funding. Jeneration Cash, 10T Holdings, and its current investors, Dragonfly Capital and BAI Capital, are the principal sponsors of the new capital injection. Circle Ventures and several family offices in the Asia-Pacific area are among the other investors.
Due to its affiliation with Three Arrows Capital (3AC), a competing staking site, Finblox took a similar stance on Thursday and limited withdrawals to $1,500 monthly. Several prestigious exchanges liquidated the fund’s positions, placing Three Arrows Capital at the focus of insolvency conjecture.
The recent crypto crash has left many projects biting the dust. 3AC and Celsius were at the forefront of the drama that unfolded. Previously in May, we saw the demise of the popular crypto project Terra, whose LUNA token depreciated from over a hundred dollars to less than a cent.
The current market scenario has pulled back the curtain on many of the shortcomings of such businesses, especially with lending and Defi platforms. Experts suggest that the crypto winter we find ourselves in may last quite some time, some even saying that it could be a good two years before we see some positive action in the crypto and Defi space.