Babel Finance, a Hong Kong-based asset management firm and cryptocurrency lender, is the latest cryptocurrency lending provider to be hit hard by the current market. Babel Finance said on Friday that redemptions and withdrawals from its products would be temporarily halted due to “unusual liquidity challenges.”
According to a note on Babel Finance’s website, “Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events.” The company stated it is in close contact with all the involved parties related to the situation and further reiterated that it is taking any measure necessary to protect its clients. “Babel Finance is taking steps to best protect our clients’ interests…We are in close contact with all relevant stakeholders and will provide timely updates,” a corporate representative said.
A Description Of Babel Finance
Babel Finance, which was founded in 2018, is a significant cryptocurrency financial services provider that supplies institutional investors with crypto loans, asset management, and financing services. The company’s portfolio generated an average monthly trading volume of $8 billion. Babel raised $40 million in a Series A fundraising round led by Zoo Capital, Sequoia Capital China, Dragonfly Capital, and Tiger Global Management in early May 2022. Babel has grown from a cryptocurrency lending company aimed at miners to a full-service crypto asset management for institutional investors. It now provides crypto lending and borrowing, as well as portfolio management, to a group of 500-plus companies and high-net-worth individuals.
Furthermore, because Babel “has no exposure” to the coins and limited its operations to BTC, ETH, and specific stablecoins, the recent fall of Luna and stable coin UST had “no influence” on the firm’s business. At the end of 2021, the startup claimed to have a loan amount of over $3 billion and an average monthly derivatives trading volume of $800 million. It has structured and traded options contracts worth more than $20 billion.
Babel, like other deep-pocketed crypto businesses, was investing in early-stage enterprises with its venture capital funds. It has invested in over ten startups focused on crypto finance, brokerage and trading, and decentralized finance (Defi) since 2020, albeit the company did not specify which ones.
While this description makes Babel seem to be in good standing, they are still suffering from the market and a clear lack of liquidity. Babel has not yet announced when withdrawals will again be allowed on the platform.
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