Babel Finance stressed that it will actively fulfill its legal responsibilities to customers and try to avoid further transmission and diffusion of liquidity risks.
Babel Finance, a Hong Kong-based crypto lending service, has resolved some of its immediate liquidity issues by striking debt repayment agreements with several of its counterparties.
As previously reported, on June 17, the firm ordered a temporary halt of redemptions and withdrawals from its products, citing “exceptional liquidity challenges” in the present bear market. The organization indicated that it was acting quickly to protect customers and engage with “all associated parties.”
Babel Finance claimed in a June 20 statement that it has since taken three initiatives to help alleviate its present liquidity problem. These include doing an emergency review of the company’s operations, contacting shareholders/investors, and negotiating “preliminary agreements” for some debt repayments.
The corporation did not provide specifics about the debt repayment programs, such as interest rates or maturity dates, but did state:
“We have communicated with major counterparties and relevant customers and reached preliminary agreements on the repayment period of some debts, which has eased the company’s short-term liquidity pressure.”
The company also indicated that it informed some shareholders and investors about the possibility of obtaining liquidity assistance and that it will “actively perform its legal commitments to consumers and endeavor to avoid future transmission and dispersion of liquidity issues.”
“We thank our consumers for their patience and support during this difficult time, and we expect to get additional assistance from our partners,” the company said.
The company’s cash problems came barely a month after it raised $80 million in a Series B investment round at a $2 billion value. The startup also raised $40 million in a Series A fundraising round led by Zoo Capital, Sequoia Capital China, Dragonfly Capital, and Tiger Global Management the year before.
According to the company, Babel Finance provides financial exposure to Bitcoin (BTC), Ether (ETH), and stablecoins to a “limited clientele of roughly 500 customers.”
The company joins a slew of cryptocurrency firms experiencing liquidity issues in the current bear market, including Three Arrows Capital, Celsius, and Finblox, to name a few. The latter two have also paused withdrawals.
