Cryptocurrency lender Babel Finance, which halted withdrawals on June 17 citing liquidity pressure, has reached preliminary agreements with counterparties to ease short-term liquidity.
The company announced on June 20 that its agreements with major counterparties on the repayment period of some debts have eased the present cash crunch.
The announcement said that Babel Finance has also conducted an “emergency assessment” of its operations to determine its current liquidity status. The firm will continue communicating with shareholders and potential investors to gain liquidity support.
The announcement also said:
“Babel Finance will actively fulfill its legal responsibilities to customers and strive to avoid further transmission and diffusion of liquidity risks.”
Babel Finance is not the only crypto firm hit hard by the current market turmoil. Celsius, which had over $11.8 billion in assets as of May 2022, halted withdrawals on June 13. Since then, there have been widespread speculations about the risks of Celsius becoming insolvent, which could impact over 1.7 million users.
Founded in 2018, Babel Finance is backed by marquee investors, including Circle Ventures and Dragonfly Capital. In May, the firm raised $80 million in a Series B funding round, pushing its valuation to $2 billion. As of December 31, 2021, the firm said Babel Finance had an outstanding loan balance of over $3 billion.