Summary:
- The firm cited unusual liquidity pressure as the main reason.
- Babel has now halted withdrawals and redemption till further notice.
- FatManTerra from the Terra community claims that Babel has heavy losses on one of its positions.
- Tether CTO Paolo Ardoino confirmed that Babel has no borrowing positions on Bitfinex.
Babel Finance has suspended redemptions and withdrawals on its platform until further notice, per details from an announcement released on Friday.
According to the statement, the service has halted some features due to unusual liquidity pressure. Babel also cited conductive risk events experienced by some companies amid heavy fluctuations and volatility in the crypto market.
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.
The crypto lending and digital asset service provider mammoth launched in 2018. Based in Hong Kong, the company is valued at $2 billion following a recent $80 million Series B funding round.
It remains unclear if Babel is faced with the same liquidation events and margin calls currently looming over crypto hedge fund Three Arrows Capital.
Tether CTO Confirms Babel Finance Has No Open Positions On Bitfinex
According to WuBlockchain, Tether’s Chief Technology Officer Paolo Ardoino confirmed that Babel Finance closed their positions.
However, FatManTerra, a community member from Terra claims to have inside knowledge on the matter. FatManTerra tweeted that the crypto lender supposedly has considerable losses on an unnamed platform. The pseudonymous account also claims to know one of Babel’s lenders, a market maker called Genesis Trading.