Hong Kong-based crypto lending firm Babel Finance has eased some of its immediate liquidity troubles by reaching debt repayments agreements with some of its counterparties.
As previously reported, the firm issued a temporary suspension of redemptions and withdrawals from its products on Friday after citing “unusual liquidity pressures” in the current bear market. The company stated it was taking swift action to protect clients and communicate with “all related parties.”
In an update posted on Monday, Babel Finance stated that it has since taken three steps to help ease its current liquidity situation. These include carrying out an emergency assessment of the firm’s business operations, communicating with shareholders/investors and reaching “preliminary agreements” for some debt repayments.
The company didn’t specify specific details about the debt 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 also stated that it communicated with certain shareholders and investors about the potential to obtain liquidity support and will “actively fulfill its legal responsibilities to customers and strive to avoid further transmission and diffusion of liquidity risks.”
“We thank our customers for their understanding and support during this period and hope to obtain further support from our partners,” the firm stated.
The firm’s liquidity issues come just a month after it raised $80 million in a Series B funding round at a valuation of $2 billion. The year prior, 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.
The company joins a host of crypto firms undergoing liquidity troubles in the current bear market, including Three Arrows Capital, Celsius, and Finblox, to name a few, with the latter two also moving to pause withdrawals.