Cryptocurrency Market Plummet, Babel Finance Suspends Withdrawals

Reuters reported on June 17, Hong Kong-based crypto lender Babel Finance has temporarily suspended its withdrawals and redemption services for crypto assets on Friday.

Flex Yang, founder of Babel Finance (Photo Source: techafricax.com)

The valuation of cryptocurrencies has fallen sharply in recent weeks as investors sell risky assets in an environment of rising interest rates. After hitting a record high of $69,000 last November, bitcoin has lost more than half its value this year. Babel Finance scrambles to pay customers after the recent crash in the digital currency market. “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.

Cryptocurrency lending institutions collect cryptocurrency deposits from retail customers and reinvest them. The proclaimed double-digit returns attracted tens of billions of dollars in capital. However, the recent financial crisis has made it impossible for lenders to redeem their clients’ assets.

Babel Finance has 500 investor’s accounts, which are limited to bitcoin, ethereum and stablecoin. In its Series B funding round last month, the company raised $80 million at a valuation of US$2 billion.