Babel Finance, an Asia-based crypto financial service, has now halted customer withdrawals amid turmoil within the crypto space. Hong Kong-based crypto lender Babel Finance, through an announcement on its official website, said:
“Some institutions in the industry have experienced conductive event risk”, and for this reason, “Babel Finance faces unusual liquidity pressures”
Babel Finance, within 3 years of its creation, reached an outstanding balance of $2 billion worth of crypto with a monthly trading volume of $8 billion. The crypto lending platform raised $40 million in Series A and recently raised $80 million in Series B. Despite the financial success, the business model was under heavy suspicion from the start.
Also Read: Celsius Network: Ethereum Crisis Not Over Yet, Protocol May Liquidate Its Collateral: Report
According to some reportsDuring the crash of March 2020, Babel Finance was reported to be misusing client funds through highly leveraged transactions without their consent. The collapse caused the lending company to go from wealth to platforms and thus look to Tether, one of its creditors, to extend the payment period from 48 hours to a month. Tether is accused of keeping its dealings with Babel Finance secret in order to drain Babel’s reserves.
On the other hand, the platform is currently supposed to have posted a whopping 9-digit loss and thus a popular analyst is urging clients to withdraw their capital before it is too late.
A verified source has confirmed that Babel Finance, a large Chinese cryptocurrency management fund, is currently facing nine-figure losses: Babel clients and counterparties, please withdraw your capital for the time being if you can.
— FatMan (@FatManTerra) June 17, 2022
The constant hammer in the crypto space that started with the UST, was followed by the Celsius Network stopping withdrawals and the 3AC liquidity crisis. Now, when another crypto lending company is facing liquidity problems, it may not be a good sign for the crypto space. According to another analystthe entire crypto industry is illiquid enough at the moment to pay their clients.
Also Read: This stETH Pool Has Completely Drained Trapped Investors
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This post Babel Finance Stops Client Withdrawals And Resumes, Is The Crypto Space Under Deep Water?
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