Babel Finance, a crypto-financial service provider, has stopped withdrawals and redemptions citing ‘liquidity pressure’ as cryptocurrency prices continue to drop, following the steps of Celsius.
The crypto lender in a recent release said that Babel Finance is experiencing ‘unusual’ liquidity pressures because of the crypto market conditions, its fluctuations, and conductive risk factors that some institutions went through.
Furthermore, the provide apologized to its investors while stating that ‘resumption of normal service be notified separately,’
Due to extreme market conditions, Celsius stopped its withdrawals, swaps, and transfers for its users on June 13.
Babel Finance only provides its services related to Bitcoin(BTC), Ethereum(ETH), and stable coins which foster a select clientele of around 500 customers. The company had a balance owed of over $3 billion and an average monthly trading volume of $800 million in derivatives.
The platform has yet to disclose its strategy on how to handle the crisis.
On the contrary, as per the reports, Celsius has hired Citigroup in an “advisory capacity” while large whales are undertaking a sell-off leading to its continuous downfall. Celsius has claimed to serve a client base of 1.7 million users.
In just over a week, the already struggling crypto market has fallen to $937 billion from a global cryptocurrency market cap of $1.3 trillion. In the past seven days, the top cryptocurrency lost around 30% of its value and at the time of writing was standing at $19,681.42.
Meanwhile, another leading digital asset company, Amber Group has noted in a blog that it is ‘business as usual for them despite the market risks.
Further stating, Amber said that they have never been involved in any business that involves underwriting credit risk of borrowers, and have no plans to in the future.
Moreover, the company verified that they have “zero risk exposure” to any of the market participants with possible “solvency issues”. Hence, the digital asset firm makes sure that all products and services will resume their function as usual and will face no distraction from “trading, earn, and dual-currency products, deposits, and withdrawals.”
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