HONG KONG -- A trio of Hong Kong cryptocurrency platforms have suspended client withdrawals on the back of a global sell-off that has plunged the digital currency sector into turmoil.
On Sunday, crypto trading exchange Hoo.com announced it was stopping all transactions after being hit by a heavy volume of redemption requests, just days following the collapse of Singapore-based crypto hedge fund Three Arrows Capital.
Hoo later said in a blog post that it would restart transactions within 72 hours so it could "process a large number of users' withdrawal demands and ensure the safety and accuracy of withdrawal assets."
The Cayman Islands-registered company, launched in 2017, has seen its trading volume drop 10% in the last 24 hours, according to crypto index nomics.
Hoo's problems come after Hong Kong crypto lender Babel Finance also suspended redemptions on Friday, citing "unusual liquidity pressures" and market volatility, after raising $80 million in fresh fundraising only last month.
A third Hong Kong crypto savings platform Finblox -- backed by venture capital group Sequoia Capital -- said Friday it would cap daily withdrawals at $500 and stop registering new users. On Monday, Finblox said it was considering legal recourse to address the squeeze.
None of the three Hong Kong-based platforms replied to requests for comment.
Cryptocurrencies plunged into free fall as the price of Luna, one of the biggest, collapsed in a rout last month that triggered a $280 billion sell-off across dozens of digital units, including bitcoin and Ethereum.
The plummet sparked fresh calls to regulate the volatile market and raised questions about the underlying value of cryptocurrencies, with bitcoin's value now hovering around $20,000, down to a third of its peak in November.
The world's second-biggest crypto lender, U.S.-based Celsius Network, told users Sunday that it will pause all withdrawals as it faced rumors of insolvency.
Last week, Singapore's Three Arrows Capital, one of the biggest crypto players, failed to meet margin calls and some of the fund's positions were reportedly liquidated.
Three Arrows, known as 3AC, has said it has hired legal and financial advisers to "work out a solution for its investors and lenders."
The hedge fund invests in a range of cryptocurrency companies and projects. One of the targets is a company behind Terra Classic USD, the stablecoin pegged to the U.S. dollar that lost parity last month and plunged.
Danny Yuan, chief executive officer of 8 Blocks Capital, accused 3AC of taking roughly $1 million from the Hong Kong company's account.
"Instead of answering the margin calls, they ghosted everyone," Yuan said in a Twitter thread. "The platforms had no choice but to liquidate their positions, causing the markets to further dump."
Marco Lim, managing partner at Hong Kong-based crypto hedge fund MaiCapital, said more platforms were likely to be hit amid the turmoil, adding that a crash in the market was likely to be a rallying call for regulators to step in.
"The whole industry needs to be restructured in order to grow and expand to further. I think it's good that we have this restructuring sooner than later," Lim said.