Crypto lending platform Babel Finance has reached a counterparty loan agreement
The firm highlighted that it will “actively fulfill its legal responsibilities to customers and strive to avoid further transmission and diffusion of liquidity risks.”
Babel Finance, a Hong Kong-based cryptocurrency lender, has eased some of its immediate liquidity problems by reaching a repayment agreement with some of its rivals.
As formerly reported, the firm issued a temporary suspension of the release and withdrawal of its products on June 17, citing “unusual liquidity pressures” in the current bear market. The agency said it was taking swift action to protect clients and was liaising with “all related parties.”
In an update posted on June 20, Babel Finance says it has taken three steps to ease its current liquidity situation. These include: making an urgent assessment of the firm’s business activities, liaising with shareholders/investors, and reaching “preliminary agreements” to repay certain debts.
The company didn’t specify specific details of the loan repayment plans, such as interest rates or maturation date but did note that:
” 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 firm further stated that it has been in touch with certain shareholders and investors about the possibility of obtaining liquidity assistance and “actively fulfil its legal responsibilities to customers and strive to avoid further transmission and diffusion of liquidity risks.”
The firm also stated, “We thank our customers for their understanding and support during this period and hope to obtain further support from our partners”.
The firm’s liquidity problems come just a month after it raised $80 million in a Series B funding round at a valuation of $2 billion. Last year, the firm also raised $ 40 million in a Series A funding round led by Zoo Capital, Sequoia Capital China, Dragonfly Capital, and Tiger Global Management.
According to the firm, Babel Finance offers financial exposure to Bitcoin (BTC), Ether (ETH), and stablecoins to a “select clientele of about 500 customers”.
The company has joined several crypto firms that are suffering from liquidity problems in the current beer market, including Three Arrows Capital, Celsius, and Finblocks, to name a few, with the latter two, are set to close.
