Why is the failure of multiple cryptocurrency firms concerning?

• Celsius Network, one of the world’s largest digital asset lenders, declared that all transfers.
• The move sent shockwaves through the sector, with many concerned about the future.
• Three Arrows Capital and Babel Finance are also in trouble, and it’s uncertain how far the ripple.

Cryptocurrency, one of the world’s largest digital asset lenders, declared that all transfers and withdrawals would be halted. The move sent shockwaves through the sector, with many concerned about the future of cryptocurrency. Three Arrows Capital and Babel Finance are also in trouble, and it’s uncertain how far the ripple effect will go.

Another big loan platform, Babel Finance, quickly followed suit. Three Arrows Capital, another well-known hedge fund, is also in danger of going bankrupt. These events have highlighted the cryptocurrency industry’s interdependence. They’ve also raised severe concerns about the space’s stability.

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These three companies dealt with distinct people, yet their failures had similar outcomes. The Celsius Network issued a press release on Sunday evening indicating that withdrawals and transfers would be halted. Following this, the price of Bitcoin and other cryptocurrencies, which had been falling for weeks in a “crypto winter,” plummeted even worse, and the situation hasn’t changed much five days later.

Celsius Community drew retail customers. According to CNBC, Babel Finance has 500 clients and has raised $80 million in a monthly fundraising round. According to Fortune, 3AC manages $10 billion in assets and is engaged in bitcoin startups. The repercussions of the companies’ collapse are anticipated to have a huge impact on the entire cryptocurrency sector.

The interconnection of these enterprises is what causes the crypto community to be concerned about their failures. According to sources, Three Arrows Capital’s positions have been liquidated on FTX, Deribit, and BitMEX in the last week. Three Arrows Capital has lost millions of dollars as a result of this, forcing it to liquidate some of its investments at a loss.

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