ANOTHER Crypto lender stops customers withdrawing their money citing ‘liquidity pressures’

A Hong-Kong based crypto-lender has suspended withdrawals amid a wide-scale downfall in the market.

Babel Finance said it is ‘facing unusual liquidity’ in a statement on its website.

They said: ‘We are in close communication with all related parties on the actions we are taking in order to best protect our customers.

‘During this period, redemptions and withdrawals from Babel Finance products will be temporarily suspended, and resumption of normal service be notified separately. 

‘We apologize sincerely for any inconvenience caused.’

They are the third major lender to freeze withdrawals in recent days after major U.S. cryptocurrency lending company Celsius Network froze withdrawals and transfers citing ‘extreme’ conditions on June 12.

Celsius offers interest-bearing products to customers who deposit cryptocurrencies at its platform, and then lends out cryptocurrencies to earn a return.

In a blog post, the company said it had frozen withdrawals, as well as transfers between accounts, ‘to stabilize liquidity and operations while we take steps to preserve and protect assets.’

‘We are taking this action today to put Celsius in a better position to honor, over time, its withdrawal obligations,’ the New Jersey-based company said.

It is the latest sign of global financial turmoil spilling creating volatility in the crypto markets.

Bitcoin was the original digital currency started in 2009 to bypass central banks, and an increasing number of offshoot currencies have been founded in recent years as well as digital art called non-fungible tokens.

Crypto has been sharply decreasing in value in recent weeks including one currency that has lost 98% of its value as fears for the global economy spread and investors start to sell off risky assets.

Crypto value dropped below $1 trillion on Monday for the first time since January 2021, dragged down by 11 percent fall in Bitcoin.

On Monday, Binance, the world’s biggest cryptocurrency exchange, also paused withdrawals, blaming ‘stuck transaction’ that caused a backlog in trades.

There are fears that the latest crypto crash has only just begun as Bitcoin down to $21,016.80 today – having been traded for over $30,000 as recently as May 31.