Falling cryptocurrencies: CeFi Babel Finance, in turn, blocks withdrawals

CeFi in confusion – In a few weeks, bitcoin and other cryptocurrencies recorded a significant decline. Faced with this collapse, many players in the ecosystem have found that they face serious liquidity problems. After Celsius or even Three Arrow Capital, it’s Babel Finance’s turn to pay the price. Thus, the company announced the suspension of withdrawals.

Babel Finance suspends withdrawals

BabelFinance is an Asian service CeFi (centralized finance) was launched in March 2018. It offers its users a variety of financial products in the field of cryptocurrencies, such as loans or savings. In this way, users can make a profit by depositing cryptocurrencies on the platform. It is obvious that after the deposit the funds are completely controlled by the platform.

Babel Finance logo

However, like several CeFi service providers, Babel Finance has been hit hard by the general decline in cryptocurrency markets.

Yes, on June 17 the company announced this “Purchase and withdrawal of Babel Finance products will be temporarily suspended”. As a result, users can no longer withdraw their funds from the platform until further notice.

In a statement posted on the official blog, Babel Finance explains blocking withdrawals to protect its users. Once out of the ordinary, Babel explains liquidity problems.

“Due to the current market situation, Babel Finance is facing unusual liquidity pressures. We work closely with all relevant parties on the actions we take to best protect our customers. “

Investors are beginning to panic. Indeed, the latter fears that Babel Finance will not be able to withstand 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 cryptocurrency service affected by the downturn.

In fact, the company Celsius is in the spotlight for more than a week after the announcement suspension of withdrawals on its credit platform. Thus, the company also faces significant liquidity problems. Since then, she has tried to maintain her various positions. Indeed, Celsius has repeatedly added funds to increase the collateral ratio of several of its cryptocurrency loans.

A few days after the statements of Celsius, c FUD (Fear Uncertainty Doubt) impressed the investment fund Three Arrow Capital. In total, more than recorded $ 400 million in liquidation on several of their DeFi loans. The situation continues to deteriorate and was triggered by the fall of UST Terra Luna, which has hit the fund hard.

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

As Sami recently reminded, it would be wise to withdraw their 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. Indeed, the company has sought the help of CitiGroup Bank to obtain strategic expertise to resolve this crisis.

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