Crypto lending firm Babel Finance, which abruptly halted client withdrawals and redemptions for all products last Friday, told Bloomberg that it was set to delay its debt repayments after reaching agreements with major counterparts and customers. However, it’s still uncertain when the company will resume withdrawals and redemptions.
- The Hong Kong-based crypto firm said in a statement that the preliminary agreement of reprieving the debt repayments had eased its short-term liquidity pressures. The relief came after the company implemented an emergency assessment of its business operations.
- The troubled crypto lender is in conversations with large institutions for solutions, including “setting up a new entity to take up some of the debts.”
- In the wake of Celsius blocking all withdrawals, swaps, and transfers between accounts and failing to provide an immediate solution to its users, Babel Finance followed a similar approach last Friday, citing extreme market conditions and liquidity issues as the reason behind such a move.
- Reportedly, the crypto firm refuted the rumor that it had told its partners that it was insolvent. In terms of the speculation regarding its liquidity crisis, the firm clarified that it had no business with the crypto hedge fund Three Arrow Capital, which, as Crypto Potato reported earlier, sought bailouts through “asset sale and a rescue by another firm.”
- Though the company noted that it would “provide updates in a timely and transparent manner,” it did not release details regarding when the platform will let users withdraw their funds.
- In a previous funding round backed by renowned VCs such as Sequoia Capital China, Jeneration Capital, Dan Tapiero’s 10T Holdings, and Dragonfly Capital last month, the firm was valued at $2 billion after raising $80 million. However, the company had an outstanding loan balance of more than $3 billion at the end of last year, Bloomberg stated.