Babel Finance Working To Ease ‘Unusual Liquidity Pressures’
The crypto financial services provider suspended redemptions and withdrawals from its products on Friday
Del Wang, co-founder and CEO of Babel Finance | Source: Babel Finance
key takeaways
- Babel Finance pledged to continue to obtain liquidity support in an effort to protect investors
- The company raised $80 million at a $2 billion valuation last month
Babel Finance has reached preliminary agreements with counterparties and customers dealing with the repayment period of some debts to ease the company’s liquidity pressure in the short term.
The update, shared on the crypto lender’s website on Monday, follows Babel Finance — as well as other crypto companies such as Celsius and Three Arrows Capital — disclosing liquidity issues in recent days as crypto prices have plunged.
The price of bitcoin was at $20,640 at 10:30 am ET on Monday morning, according to data compiled by Blockworks — up about 6% in the past 24 hours but down roughly 23% from a week ago.
Babel Finance revealed on Friday that redemptions and withdrawals from its products would be temporarily suspended amid “unusual liquidity pressures.”
The company noted in its Monday statement that it did an emergency assessment of its business operations and looks to fulfill its legal responsibilities to customers by continuing “to avoid further transmission and diffusion of liquidity risks.”
“We have actively communicated with shareholders and potential investors, and will continue to communicate and obtain liquidity support,” according to the statement.
“Given the current context of severe market volatility, Babel Finance’s management will continue to communicate closely with customers, counterparties, and other partners, and provide updates in a timely and transparent manner.”
Babel Finance did not immediately return a request for further comment.
Founded in 2018, the crypto financial services provider’s main businesses are lending and trading — it focuses on bitcoin, ether and stablecoins.
Babel Finance raised $80 million at a $2 billion valuation last month. Main investors in the round included Jeneration Capital and 10T Holdings, as well as existing shareholders Dragonfly Capital and BAI Capital.
The firm, which currently had about 500 clients, raised $40 million in its series A round in May 2021.
Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.
