On June 17, Hong Kong-based crypto lending firm, Babel Finance, temporarily banned all crypto asset withdrawals and redemptions as the crypto lender scrambled to pay its clients following the recent downturn in the cryptocurrency market. The company has explained the move as due to unusual liquidity strain.
Babel Finance notice to customers
In this regard, Babel Finance has issued a notice on their official website at https://babel.finance/article-views.html?id=50. The company has further informed its customers that the current action of the company is towards safeguarding them while the markets continue to move sideways. It’s worth noting that the majority of institutions in the crypto business have experienced conductive risk occurrences.
The notice read:
“Recently, the crypto market has seen major 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 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. We apologize sincerely for any inconvenience caused.”
Finbox has decreased withdrawal limits
With the plunge in crypto markets, DeFi platforms appear to be pausing withdrawals, with others, such as Celsius, going so far as to halt swaps and internal transfers. Following the deterioration of cryptocurrency prices, Three Arrows Capital (3AC) has found itself in the heart of insolvency rumours. The firm’s leveraged holdings were liquidated today by three cryptocurrency exchanges: FTX, BitMEX, and Deribit.
IMPORTANT UPDATE FROM FINBLOX! pic.twitter.com/VjclRMMiSe
— Finblox (@finblox) June 16, 2022
On June 15, there was news that 3AC is likely to fail as a result of a $400 million liquidation. After the announcement of the news, Finblox, a staking platform, tweeted on June 16 that they have decreased withdrawal limits from $500 per day to $1,500 per month. The company has also disabled the creation of addresses for new users. The move from the company was a result of their investment in 3AC. The statement from Finblox as shared on Twitter read as follows:
“This set of actions is a necessary move in such a highly volatile market and we believe should help us and our community to manage the effect. Finblox will do everything in its power to protect users’ funds and reinstate our services in full.”
