Babel Finance Said to Stop Customer Withdrawals as Crypto Fallout Widens

2022-06-17 17:58:11

By Geoffrey Smith

Investing.com — Babel Finance has become the latest high-profile cryptocurrency lender to suspend customer withdrawals, CoinDesk reported on Friday.

“Babel Finance is facing unusual liquidity pressures,” CoinDesk quoted a statement from the Hong Kong-based company as saying, adding that it attributed its actions to major fluctuations in the market and “conductive risk events” among institutional market participants.

If confirmed, Babel would be at least the third major lender to have frozen withdrawals in a week, following Celsius Network at the weekend and Finblox on Thursday.

Babel Finance didn’t immediately respond to a request for comment from Investing.com, nor had Babel published any such statement on its website.

Babel had raised $80 million in fresh funding less than a month ago, valuing its total equity at some $2 billion. It had said that the funding round was backed by Jeneration Capital and 10T Holdings, as well as existing shareholders Dragonfly Capital and BAI Capital, along with various Asian family offices.

Babel is one of a number of Hong Kong-based companies to have been caught out by the recent slump in prices for and other cryptocurrencies. Both Babel and Finblox appear to have been caught up by the collapse of crypto hedge fund 3 Arrows Capital, which said on Friday that it has hired legal and financial advisers to help it restructure after suffering heavy losses.

“We are committed to working things out and finding an equitable solution for all our constituent,” co-founder Kyle Davies told The Wall Street Journal.

Rumors of 3AC’s problems had been circulating in the market all week, culminating in an open attack on Twitter by Danny Yuan, chief executive officer of cryptocurrency trading firm 8 Blocks Capital.

Yuan said his firm had liquidated 3AC’s positions with it after it failed to respond to margin calls as the market turned against it.

“What we learned is that they were leveraged long everywhere and were getting margin-called. Instead of answering the margin calls, they ghosted everyone,” Yuan wrote. “The platforms had no choice but to liquidate their positions, causing the markets to further dump.”

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Source by [earlynews24.com]