Cryptocurrency startup suspends withdrawals after receiving $80 million in funding

The cryptocurrency startup Babel Finance, a Hong Kong-based cryptocurrency financial services provider, has blocked cryptocurrency withdrawals. The suspension of withdrawals comes less than a month after the company raised $80 million in an investment round. The company did not say when withdrawals would resume.

Babel Finance joins the list of cryptocurrency lending companies struggling to cope with the chaos of the cryptocurrency market.

The startup said it was under “unusual liquidity pressure.” Therefore, he had no choice but to make this announcement.

“Recently, the cryptocurrency market has seen significant fluctuations and some institutions in the industry have experienced conductive risk events. Due to the current situation, Babel Finance is facing unusual liquidity pressures.

We are in close communication with all related parties about the steps we are taking to better protect our customers.

During this period, redemptions and withdrawals of Babel Finance products will be temporarily suspended and the resumption of service will be notified separately. We sincerely apologize for any inconvenience caused.

Bitcoin has lost over 60% of its value since hitting an all-time high of $69,000 last November. Investors continue to sell their risky assets following the tightening of monetary policies by central banks.

Several cryptocurrency companies are experiencing similar situations. Every day there is news of one or more companies collapsing. The most recent were Celsius and Three Arrows Capital.

Babel Finance

Babel Finance had a loan balance of nearly $3 billion at the end of 2021. It had a monthly derivatives trading volume of $800 million and traded over $20 billion in options products.

On Thursday, June 16, Finblox, a rival platform to Babel Finance, made a similar decision, limiting withdrawals to $1,500 per month.

The team said they are in continuous communication with all parties about their efforts to ensure the best protection for their customers.

Redemption and withdrawal of Babel Finance products will be temporarily halted, according to the announcement. The reinstatement of regular service, according to the company, does not yet have a date.

The company started in 2018 as a lender to cryptocurrency miners in China. He has since turned to institutional investors in Singapore and Hong Kong.

The company has suspended withdrawals, according to an announcement posted on the company’s website.

“Babel Finance faces unusual liquidity pressures,” before referring to large market swings and “conductive risk events” among institutional market players.

Last month, Babel was awarded $80 million in a Series B round with a valuation of $2 billion.

At the end of 2021, Babel Finance’s loan balance was over $3 billion, up from $2 billion the previous February.

The cryptocurrency market is at its lowest point since December 2020, with bitcoin trading just above $20,000.

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