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Crypto fallout continues as major Hong Kong exchange works to reopen some token withdrawals and Finblox scrambles for more liquidity

June 20, 2022, 10:57 PM UTC
The Chinese imperial-style Jumbo Floating Restaurant is seen at a typhoon shelter in Aberdeen on June 13 in Hong Kong, China. The iconic Jumbo Floating Restaurant in Hong Kong is set to depart the city, amid a lack of funds to maintain the restaurant following months of COVID-19 restrictions.
Anthony Kwan—Getty Images

The CEO of Hong Kong-based cryptocurrency exchange tweeted early Monday that his company will open withdrawals for some tokens today after announcing on Sunday in a blog post it would be delaying withdrawals for 24 to 72 hours.

In its Sunday post, cited market volatility and liquidations by large institutions in the crypto industry as creating panic among users and leading to a large number of withdrawal requests.

“Meanwhile, the transfer of backup multi-signature wallet and other assets needs time to deal with,” wrote. “In order to process a large number of users’ withdrawal assets, the withdrawal audit time may be delayed for 24-72 hours, after which the withdrawal will be resumed soon.”

Hoo’s update comes as global crypto platforms deal with withdrawal requests amid market volatility and uncertainty around crypto hedge fund Three Arrows Capital, which suffered heavy losses and is exploring options such as asset sales or a bailout by another firm.

On Thursday, Hong-Kong based crypto staking and yield generation platform Finblox imposed a $1,500 monthly withdrawal limit and paused rewards in light of uncertainty surrounding Three Arrows, which made a $3.6 million investment in Finblox in December.

Finblox said early Monday it is “actively pursuing all available options (including legal recourse) to address the liquidity situation that has arisen due to the recent developments around Three Arrows Capital (3AC) and the market in general.”

Finblox said it’s in the process of consolidating all users’ funds to evaluate the impacts of the current environment. The company is “investigating and assessing a range of possible scenarios and the potential effects that these scenarios could have on the liquidity of our Users’ accounts.” This includes operations and withdrawal time resumptions.

Meanwhile, Hong Kong-based crypto lender Babel Finance on Friday suspended withdrawals and redemptions, citing “unusual liquidity pressures.”

On Monday, however, Babel said it had reached preliminary agreements with counterparties on the repayment of some debts that led to the halt on withdrawals. “We have actively communicated with shareholders and potential investors, and will continue to communicate and obtain liquidity support,” Babel said in a statement.

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