Freezing Of Crypto
Freezing Of Crypto: Hong Kong-based Babel Finance temporarily suspended the withdrawals and redemption of crypto assets.
Crypto lender Babel Finance suspends withdrawals as markets slump
Hong Kong-based Babel Finance temporarily suspended the withdrawals and redemption of crypto assets on Friday, as the crypto lender scrambles to pay its clients after the recent slump in the digital currency market.
Cryptocurrency valuations have plunged in recent weeks as investors dump risky assets in a rising rate environment, with bitcoin, which reached a record high of $69,000 in November, having lost more than half its value this year.
Crypto Tumult Spreads as Lender Babel Puts Freeze on Withdrawals
“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,” the company said.
Crypto lenders gather crypto deposits from retail customers and re-invest them, proclaiming double-digit returns and attracting tens of billions of dollars in assets. However, the recent meltdown has lenders unable to redeem their clients’ assets.
Babel, which has 500 clients and limits itself to bitcoin, Ethereum, and stablecoins, raised $80 million in a funding round last month, valuing it at $2 billion. It had ended last year with $3 billion of loan balances on its balance sheet.
Another crypto lending platform is freezing withdrawals as the industry’s downward spiral continues
CommentsEarlier this week, U.S.-based retail crypto lending platform Celsius Network froze withdrawals and transfers between accounts “to stabilize liquidity” as the collapse of cryptocurrency TerraUSD in May triggered a rise in redemptions.
Another major crypto lending platform has stopped letting people take out their holdings.
Babel Finance, which is based in Hong Kong and boasts a customer base of 500, said Friday that withdrawals from its services will be “temporarily suspended” as cryptocurrencies face a brutal and widespread selloff.
“The crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events,” Babel said on its website. “Due to the current situation, Babel Finance is facing unusual liquidity pressures.”
Weekly Crypto Roundup: firings, freezing, and falls
Crypto is chaotic on its best days, but this week saw a global descent into panic as crisis after the crisis hit those invested in the sector.
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As prices of cryptocurrencies tumbled, employees of prominent crypto exchanges were laid off. Coinbase CEO Brian Armstrong admitted that the company had hired too many people as Bitcoin’s price rose to an all-time high of over $67,000 in 2021. But with prices falling since then, Armstrong said employee costs were too high in an “uncertain market.” The result: about 18% of Coinbase’s global staff members, including 8% of its employees in India, were shown the door.
Other large crypto exchanges, including BlockFi and Crypto.com, also announced plans to cut jobs.
Coinbase shared a ‘Talent Hub’ for affected employees to list their qualifications to find new roles.
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This exploits the design and protocol of certain cryptocurrencies like USDT and Coinbase’s USD Coin, where the minters retain certain rights over crypto assets.
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