The company completed a $80 million Series B financing round last month, giving it a $2 billion valuation. Babel’s business is limited to Bitcoin, Ethereum, and stablecoins, and it only has about 500 customers.

Image credit: Sureblog.io | Twitter: @Sureblogio

Babel Finance, based in Hong Kong, temporarily halted withdrawals and redemptions of crypto assets on Friday, as the crypto lender scrambles to pay its clients following the recent market downturn.

This news comes just days after cryptocurrency lending platform Celsius halted withdrawals due to “extreme market conditions.”

Cryptocurrency prices have plummeted in recent weeks as investors flee risky assets in a rising rate environment, with bitcoin losing more than half its value this year after reaching a record high of $69,000 in November.

Following the announcement, the price of Celsius’ native Celsius token dropped over 50% to $0.20 per token, and is now trading at $0.57, according to CoinMarketCap data.

Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events. Due to the current situation, Babel Finance is facing unusual liquidity pressures
— Babel Finance

The company stated that it was in constant contact with all relevant parties regarding the actions it was taking to best protect its customers.

Crypto lenders collect cryptocurrency deposits from retail customers and reinvest them, boasting double-digit returns and attracting tens of billions of dollars in assets. However, due to the recent financial crisis, lenders have been unable to redeem their clients’ assets.

During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately
— Babel Finance

After completing a $80 million Series B financing round last month, the company, which bills itself as “the world’s leading wholesale crypto financial services provider,” was valued at $2 billion.

Babel, which only accepts bitcoin, ethereum, and stablecoins and has 500 clients, raised $80 million in a funding round last month, valuing it at $2 billion. It had $3 billion in loan balances on its balance sheet at the end of last year.

The firm had a loan balance of more than $3 billion at the end of 2021, an average monthly derivatives trading volume of $800 million, and had structured and traded more than $20 billion in options products.

Since raising $40 million in Series A funding in May 2021, the company has grown from 50 to over 170 employees and opened a new office in Singapore.

Babel Finance has joined the growing list of crypto lending companies experiencing major issues as a result of current market conditions by suspending withdrawals. Celsius, a cryptocurrency staking and lending platform, was one of the first to recognize the ongoing crypto lending crisis, halting withdrawals on its platform on Monday.

The collapse of cryptocurrency TerraUSD in May triggered a surge in redemptions, prompting Celsius Network, a U.S.-based retail crypto lending platform, to halt withdrawals and transfers between accounts “to stabilize liquidity.”