Daily Management Review

Withdrawals At Babel Finance Halted As Cryptocurrency Markets Fall


Withdrawals At Babel Finance Halted As Cryptocurrency Markets Fall
On Friday, Hong Kong-based Babel Finance briefly banned crypto asset withdrawals and redemptions as the crypto lender scrambled to pay its clients following the recent downturn in the digital currency market.
Cryptocurrency valuations have plummeted in recent weeks as investors flee riskier assets in a rising rate environment, with bitcoin losing more than half its value this year after reaching a record high of $69,000 in November.
"Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events. Due to the current situation, Babel Finance is facing unusual liquidity pressures," the company said.
Crypto lenders accept retail crypto deposits and reinvest them, boasting double-digit returns and drawing tens of billions of dollars in assets. However, due to the recent financial crisis, lenders are unable to redeem their clients' assets. more info
Babel, which only accepts bitcoin, ethereum, and stablecoins, raised $80 million in a funding round last month, valuing the company at $2 billion. It had $3 billion in loan balances on its balance sheet at the end of previous year.
Celsius Network, a U.S.-based retail crypto lending platform, suspended withdrawals and transfers between accounts earlier this week "to restore liquidity" after the collapse of cryptocurrency TerraUSD in May sparked a surge in redemptions.