Just weeks after announcing an $80 million Series B that valued the company at $2 billion, Hong Kong-based Babel Finance has frozen redemptions and withdrawals on its platform.
The crypto lender and trader for institutional investors becomes the second lending platform in a week to halt transactions as a result of the severe downturn in the crypto market.
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Last weekend, crypto lending platform Celsius Network suspended withdrawals, swaps and transfers due to “extreme market conditions.” The company pays interest on crypto deposits and loans it out for return, allowing users to bypass more traditional banks.
In a posting on its website, Babel said it is following suit due to the “major fluctuations” the crypto market has seen.
“Due to the current situation, Babel Finance is facing unusual liquidity pressures,” the posting reads. “We are in close communication with all related parties on the actions we are taking in order to best protect our customers. During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately.”
It was just in late May when Babel announced it was valued at $2 billion after a fundraise that included cash from Jeneration Capital and 10T Holdings. Sequoia Capital China, Tiger Global Management and Dragonfly Capital also have invested in the company, according to Crunchbase.
This week has been one to forget for crypto enthusiasts. The two largest crypto currencies by market cap—Bitcoin and Ether—have lost more than half their value from just six months ago. In addition, the world’s largest cryptocurrency exchange by trading volume, Binance, had to temporarily pause Bitcoin withdrawals “due to a stuck transaction causing a backlog,” and large crypto platforms like BlockFi and Coinbase announced significant layoffs.
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Illustration: Dom Guzman
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