Crypto lending firm Babel Finance has eased some of its short-term liquidity problems with preliminary debt repayment agreements with counterparties.
As reported earlier, the Hong Kong-based Babel Finance issued a temporary suspension of withdrawals and redemptions from its products on Friday. The firm cited "unusual liquidity pressures" amid the current bear market.
But the company promised to take swift action to protect clients and communicate with "all related parties."
In an update on its website on Monday, Babel Finance said that it has since taken three steps to help ease the company's current liquidity status. These include carrying out an emergency assessment of its business operations, communicating with shareholders, and reaching "preliminary agreements" for some debt repayments.
However, the crypto lending firm did not specify specific details about the debt repayment plans. For instance, Babel Finance didn't mention the agreements' interest rates or maturation date.
However, the firm did mention having "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."
Also, Babel Finance stated that it has communicated with certain shareholders and investors about obtaining liquidity support. Additionally, it 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," added the firm.
Its liquidity issues come just a month after raising an $80 million Series B funding round at a $2 billion valuation. In fact, the firm raised $40 million the year prior in a Series A funding round.
Now, the company has joined a list of crypto firms undergoing liquidity issues amid the current bear market. The list includes prominent names like Three Arrows Capital, Celsius, and Finblox, with the latter two also freezing user withdrawals.