Due to the ongoing crypto market downturn, Babel Finance, an Asia-based crypto lending firm, has temporarily suspended redemptions and withdrawals across its products, citing “unusual liquidity pressure.”
On June 17, Babel Finance posted a notice on its official website to inform customers of the measures it is taking as markets remain volatile. The company emphasized that many institutions in the crypto sector have been affected by related risk events.
The notice stated:
“Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced material risk events. Due to the current situation, Babel Finance is facing unusual liquidity pressures. We are in close communication with all related parties regarding the actions we are taking to best protect our customers. During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended. Resumption of normal service will be announced separately. We sincerely apologize for any inconvenience caused.”
DeFi platforms increasingly pausing withdrawals
As crypto prices have plunged, several DeFi and crypto-focused platforms have begun pausing withdrawals or restricting customer activity. Some firms, like Celsius, expanded restrictions to include swaps and internal transfers in addition to withdrawals.
On June 16, staking platform Finblox announced it was tightening withdrawal limits after exposure to Three Arrows Capital (3AC). The platform reduced withdrawals to $1,500 per month from a previous $500 per day limit.
Three Arrows Capital has been at the center of insolvency concerns as markets deteriorated. Recently, the firm’s leveraged positions were liquidated by multiple crypto exchanges, including FTX, BitMEX, and Deribit.