Babel Finance suspended all subsequent withdrawals, on the grounds that it was "facing unusual liquidity pressures" as the cryptocurrency market floundered, perhaps due to ongoing issues with Three Arrows Capital and Celsius.
Cryptocurrency markets are facing the possibility of a liquidity squeeze as Babel Finance becomes the third-largest lender to freeze withdrawals.Cryptocurrency lender C also froze withdrawals and money transfers on June 12, citing "extreme" conditions.
Bitcoin hovers in the main support zone of $20,000 and is down about 70% so far.The rest of the cryptocurrency market is falling further and further.All of this has contributed to the sell-off perhaps somewhat similar to banking activity, as liquidity flows out of the system.
Babel Finance is the latest lender to try to stem the flow of money, and according to an article in the Mail Online, a statement from the company said:
"We are in close contact with all stakeholders about the actions we are taking to best protect our customers.
During this time, the conversion and withdrawal of funds from Babel Finance's products will be temporarily suspended and the re-continuation of normal service will be announced separately.
We sincerely apologize for any inconvenience caused."
"To stabilize liquidity and operations while we take steps to preserve and protect assets."
"We take this action today to put C in a better position to respect, over time, its withdrawal obligations," he said.
Binance, the largest cryptocurrency exchange by trading volume, also halted withdrawals on Monday, but this was confirmed to be due to "jammed trading."Normal service has resumed.
Other major cryptocurrency players, such as Coinbase, Crypto.com and BlockFi, have cut back on work so they can get through the "crypto winter" better.
Disclaimer: This article is provided only for informational purposes.It is not offered or intended for use as legal, tax, investment, financial, or other advice.