The fall of cryptocurrencies: the CeFi Babel Finance service, in turn, blocks the withdrawal of funds

CeFi in turmoil From a few weeks bitcoin and other cryptocurrencies recorded significant declines. Faced with this crash, many players in the ecosystem found themselves facing severe liquidity issues. After Celsius or even Three Arrow Capital, it was Babel Finance’s turn to pay the price. Thus, the company announced the suspension of the withdrawal of funds.

Babel Finance suspends withdrawals

BabelFinance this is an asian service CeFi (centralized finance), launched in March 2018. It offers its users various financial products in the field of cryptocurrencies, such as loans or savings. Thus, users can earn profit by depositing cryptocurrencies to the platform. Obviously, once deposited, the funds are fully controlled by the platform.

Babel Finance Logo

However, like many CeFi service providers, Babel Finance has been hit hard by the overall downturn in the cryptocurrency markets.

So, on June 17, the company announced that “Repayments and withdrawals from Babel Finance products will be temporarily suspended”. Therefore, users can no longer withdraw their funds from the platform until further notice.

In an announcement posted on the official blog, Babel Finance explains the withdrawal lock to protect its users. Once this is not accepted, Babel explains the problems that arise in terms of liquidity.

“Due to the current market situation, Babel Finance is facing an extraordinary lack of liquidity. We are in close contact with all relevant parties regarding the actions we are taking to protect our customers as much as possible.”

Panic is beginning to be felt on the part of investors. Indeed, the latter fear that Babel Finance will not be able to handle this crisis. The consequences can be dramatic and users may no longer see their precious cryptocurrency.

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Babel Finance joins Celsius and Three Arrow Capital

Obviously, Babel Finance is not the only crypto service affected by the market downturn.

Actually the company Celsius has been in the spotlight for over a week since the announcement of suspending withdrawals on your lending platform. As such, the company is also facing significant liquidity issues. Since then, he has tried to somehow maintain his different positions. Indeed, Celsius has repeatedly added funds to increase the collateral ratio of several of its crypto loans.

A few days after the announcement of Celsius, FUD (Fear Uncertainty Doubt) Hit Three Arrow Capital Investment Fund. In total, more than $400 million in liquidation across multiple DeFi lending positions. A situation that continues to worsen, and which was initiated by the fall of UST Terra Luna, which greatly affected the fund.

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

As Sami recently reminded, it would be wise to withdraw your funds from the so-called CeFi platforms before they freeze assets in turn.

Tweet from Sam_Jdc.
Tweet from Sam_Jdc.

For his part, Celsius is trying his best. Indeed, the company turned to CitiGroup for help to gain strategic expertise to manage this crisis.

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