After crypto financial service provider Babel Finance halted withdrawals and redemptions amid a market slump on Friday, the platform has now taken steps to ease short-term liquidity pressure.
In a recent notice, the platform remarked that “an emergency assessment” of the company’s liquidity status was carried out. It also said, “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.”
In addition, Babel Finance explained that it is seeking liquidity support from shareholders and potential investors amid the crunch.
We can recall that last week, the Hong Kong-based crypto lender had stated that due to the ‘condition of the current crypto market, its fluctuations, and conductive risk factors faced by some institutions,’ Babel Finance is facing ‘unusual’ liquidity pressures.
That said, the firm has now underlined that it “will continue to communicate closely with customers, counterparties, and other partners, and provide updates in a timely and transparent manner.”
Babel Finance is not alone in the liquidity pressure
The liquidity pressure had followed a major crypto slide that led to platforms like Babel Finance, Binance, Celsius, Finblox, and Three Arrows Capital Ltd., among others to pause or limit withdrawals.
With that, Celsius has reiterated that stabilizing its liquidity and operations “will take time.” It noted in a recent blog post, “We plan to continue working with regulators and officials regarding this pause and our company’s determination to find a resolution.” Meanwhile, Celsius has reportedly hired Citigroup in an “advisory capacity” as it continues to plunge this month.
In the meantime, the cumulative crypto market now totaled close to $950 billion under the currently volatile crypto market.
FTX extends credit line
FTX Trading Ltd. is reportedly providing credit lines to try to contain the plunging industry. Yesterday, crypto exchange BlockFi announced that it has secured a $250 million revolving line of credit from FTX.
Meanwhile, FTX CEO Sam Bankman-Fried is of the view that the decision by the US Federal Reserve to aggressively increase interest rates was the main reason behind the market crash.