Today, another crypto finance company, Babel Finance, just halted all withdrawals and redemptions today. Babel Finance announced:
“Recently, the crypto market has seen major fluctuations, and some institutions in the industry have experienced conductive risk events. Due to the current situation, Babel Finance is facing unusual liquidity pressures.”
Look familiar? It should. The fancy-schmancy speak is very similar to Celsius’s announcement on June 12:
“Due to extreme market conditions, today we are announcing that Celsius is pausing all withdrawals, Swap, and transfers between accounts. We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations.”
Nothing shouts confidence more than telling your depositors and customers that it’s better for them if they can’t get their money.
It seems like crypto firms that have been speculating with excessive leverage are falling like dominos this week. The hedge fund, a big player in the crypto space, Three Arrows Capital failed to meet a margin call with BlockFi. BlockFi confirmed that they, “… fully accelerated the loan and fully liquidated or hedged all the associated collateral.”