Cryptocurrency lender Babel Finance on Friday has suspended customer withdrawals and redemptions due to “unusual liquidity pressure,” the startup said in a statement.
As crypto winter sets in, “redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately,” according to the statement.
The move comes after the Hong-Kong based firm had raised $80M in a Series B financing round, valuing it at $2B.
“Babel Finance is taking action to best protect the interests of our clients. We are in close communication with all related parties and will share updates in a timely manner,” according to a company spokesman.
Babel is joining a handful of other crypto firms that have recently paused customer withdrawals. Celsius, another crypto lender, had halted all customer withdrawals followed by crypto exchange Binance’s move to halt bitcoin (BTC-USD) withdrawals.
Poor sentiment is looming across the crypto market as bitcoin (BTC-USD) -1.1% continues to trade in a narrow range of $20.2K-22.8K amid shrinking liquidity, changing hands at $20.8K as of shortly before 9:00 a.m. ET. It’s down nearly 25% over the past five sessions and around -65% from its November 2021 peak. That comes as investors shy away from riskier assets in a backdrop of tighter financial conditions and recession risks. Similarly, ethereum (ETH-USD) -2.4% is sliding to $1.08K as it manages to stay above the $1K psychological key level, but off by around 75% from its all-time high in November.
Earlier this week, (June 15) crypto hedge fund Three Arrows Capital looks at potential insolvency after liquidations.
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