The crypto finance provider is pausing withdrawals and redemptions in response to harsh market conditions.
As the crypto winter prolongs, its effects are rippling into different areas of the crypto ecosystem and forcing difficult decisions. Several crypto companies face liquidation risks, cutting their workforce and pausing user activities on their platforms to stay afloat.
The latest in a myriad of stoppages in operation is Babel Finance which served a public notice on June 17, 2022, to its users.
The notice carried information that fluctuations in the crypto market have resulted in the company “facing unusual liquidity pressures.” The company stated further that it is in close communication to ensure the protection of its customers.
As a result, “redemptions and withdrawals from Babel Finance products will be temporarily suspended,” the notice read. However, it assured that the resumption of the service would be notified separately without failing to say when.
@FatManTerra weighed in on the notice and claimed Babel is “currently facing nine-figure losses.”
He tweeted that while Babel has not yet liquidated, the idea is considered.
The crypto finance provider raised $80 million in a new investment round in May, takings its valuation to $2 billion. Jeneration Capital, Circle Ventures, and 10T Holdings joined current investors Dragonfly Capital and BAI Capital in the investment round.
Crypto institutions taking hard hits
Several cryptocurrency companies have made public headlines as they struggle to guard against rapidly depleting valuation. Since the start of Q1 2022, the entire crypto market has plunged, which has seen major cryptocurrencies fall drastically.
As per a recent report, rival crypto service provider Finblox also issued a statement informing users of new restrictions on its platform, which includes a pause on rewards and a limit on daily withdrawals, owing to its connections with Three Arrows Capital.
Celsius, which had garnered the most attention, made a similar announcement on June 12 to pause withdrawals, swaps, and transfers.
Likewise, Three Arrows Capital is the subject of insolvency speculations amidst rumors of impending liquidation.