Fall of cryptocurrencies: the CeFi Babel Finance service in turn blocks withdrawals

CeFi in turmoil – For a few weeks, Bitcoin and other cryptocurrencies recorded significant declines. Faced with this collapse, many ecosystem players have revealed they are facing major liquidity problems. After Celsius or even Three Arrow Capital, it’s up to Babel Finance to pay the price. So the company announced the suspension of withdrawals.

Babel Finance suspends withdrawals

Babel Finance is an Asian service of CeFi (centralized finance) launched in March 2018. It offers its users various financial products in the field of cryptocurrencies, such as loans or savings. Therefore, users can earn returns by depositing cryptocurrencies on the platform. Of course, once deposited, the funds are fully controlled by the platform.

However, as multiple CeFi service operators, Babel Finance has been hit hard by the general decline in cryptocurrency markets.

Thus, on June 17, the company announced it “Refunds and withdrawals of Babel Finance products will be temporarily suspended”. Therefore, users are no longer able to withdraw their funds from the platform until further notice.

In the announcement published on the official blog, Babel Finance explains the blocking of withdrawals to protect its users. Once it is not customary, Babel explains to encounter problems in terms of liquidity.

“Due to the current market situation, Babel Finance is facing unusual liquidity pressures. We are in close communication with all interested parties on the actions we are taking to better protect our customers ”.

On the part of investors, panic is beginning to be felt. The latter, in fact, fear that Babel Finance will not be able to cope with this crisis. The consequences could be dramatic and users may no longer see their precious cryptocurrency.

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Babel Finance joins Celsius and Three Arrow Capital

Of course, Babel Finance isn’t the only crypto service to be hit by the market downturn.

Indeed, the company Centigrade has been in the spotlight for more than a week after announcing the suspension of withdrawals on their lending platform. Therefore, the company also faces significant liquidity problems. Since then, he has tried to somehow maintain his various positions. In fact, Celsius has repeatedly added funds to increase the collateralisation factor of many of its cryptocurrency loans.

A few days after the Celsius announcements, the FUD (Fear Uncertainty Doubt) hit the Three Arrow Capital investment fund. In total, she has recorded more than $ 400 million in liquidations on many of its DeFi loan positions. A situation that continues to deteriorate and that was initiated by the fall of the MTS of Terra Luna, on which the bottom was widely exposed.

Unfortunately, this phenomenon may continue to spread to other CeFi players.

As Sami recently pointed out, it would be prudent to withdraw one’s funds from so-called CeFi platforms before they in turn freeze assets.

Tweet from Sam_Jdc.
Tweet from Sam_Jdc.

For his part, Celsius is trying everything for everything. The company has in fact requested the help of the CitiGroup bank to acquire strategic skills to manage this crisis situation.

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