Amid bearish market sentiments, cryptocurrency lending platform Babel Finance has announced that it was halting withdrawals as it was facing “unusual liquidity pressures.”
The announcement comes days after another Crypto lending platform Celsius (CRYPTO: CEL) paused withdrawals over what they labeled "extreme market conditions."
The price of Celsius's native Celsius token plummeted over 50% to $0.20 per token following the announcement and is now trading at $0.57, according to data from Coinmarketcap.
“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 stated.
The company said it was in close communication with all related parties on the actions it was taking in order to best protect its customers.
“During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately,” it further said.
Last month, the company, which terms itself “the world’s leading wholesale crypto financial services provider,” had received a valuation of $2 billion, after the completion of an $80 million Series B financing round.
The company limits its business to Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and stablecoins, and serves a select clientele of about 500 customers.
At the end of 2021, the firm had an outstanding loan balance of more than $3bn, an average monthly trading volume of $800m in derivatives, and had structured and traded more than $20bn in options products.
Since the firm’s $40m Series A funding in May 2021, the company has grown its headcount from around 50 people to over 170 and has opened a new office in Singapore.
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