HK-Based Babel Finance Freezes Withdrawals As Crypto Sinks

Hong Kong-based Babel Finance temporarily suspended the withdrawals and redemption of crypto assets on Friday, June 17, 2022, as the crypto lender scrambles to pay its clients after the recent slump in the digital currency market, Reuters reported.

Photo Insert: Cryptocurrency prices have plunged in recent weeks as investors flee riskier assets in a rising rate environment.

Cryptocurrency prices have plunged 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 attracting tens of billions of dollars in assets. However, due to the recent financial crisis, lenders are unable to redeem their clients' assets.

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 last year.

Earlier this week, the US-based retail crypto lending platform Celsius Network froze withdrawals and transfers between accounts "to stabilize liquidity" after the collapse of cryptocurrency TerraUSD in May triggered a surge in redemptions.

WEEKLY FEATURE : MVP Group Keeps Lights On During Pandemic