Crypto Lending Platform Babel Finance Halts Withdrawals Following Celsius

• Babel Finance had a loan balance of over $3 billion by the end of 2021.
• It had a monthly derivatives trading volume of $800 million.

Another cryptocurrency lending service, Babel Finance, based in Hong Kong, has been hit hard by the recent market drop. Babel Finance, citing “unusual liquidity pressures,” stated on Friday that redemptions and withdrawals from its products would be temporarily halted.

A recent statement on Babel Finance’s website states:

“Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events.”

Babel Finance, a significant cryptocurrency financial services company, was established in 2018 and provides institutional investors with crypto lending, asset management, and financing services. Series A fundraising was spearheaded by Zoo Capital, Sequoia Capital China, Dragonfly Capital, and Tiger Global Management in early May 2022 for Babel.

Growing Problems For Crypto Lending Firms

Babel Finance has now joined the increasing list of crypto lending companies that are having serious challenges due to the current market circumstances by suspending withdrawals. Withdrawals from the crypto staking and lending platform Celsius were formally halted on Monday, making it one of the first companies to warn about the growing crypto lending problem.

Babel Finance had a loan balance of over $3 billion by the end of 2021, up from $2 billion in February of the previous year. It had a monthly derivatives trading volume of $800 million and had constructed and traded over $20 billion in options products. According to reports, key exchanges have liquidated the holdings of Three Arrows Capital, a hedge firm that has been at the focus of bankruptcy rumors. In the cryptocurrency market, Bitcoin (BTC) is trading at just over $20,000, while Ether (ETH) is holding on to the psychological support level of $1,000.

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