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Friday, January 27, 2023

Bitvavo Suspends Repayments Until This Liquidity Issue Is Resolved

Bitvavo, the Cryptocurrency exchange based in the Netherlands revealed this Saturday that it is making an effort to recover close to $297 from DCG, the US-based Digital Currency Group, and also their subsidiaries. Earlier the DCG, which managed the funds for Bitvavo had suspended repayments, alluding to liquidity issues.

Bitvavo states that the money was lent to Genesis Global, a DCG subsidiary to enable Bitvavo customers’ products where they were given interest on the cryptocurrency tokens. Withdraws from Genesis were frozen this November after FTX collapsed. It wrote to customers in December of devising plans to preserve its assets.

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FTX went for bankruptcy proceedings on November 11 which led to around 1M customers having their net worth wiped out. The total losses are to the tune of billions. The crash echoed across the cryptocurrency world. Digital assets including bitcoin crashed heavily leading to massive erosion of wealth all around.

Bitvavo Stated DCG To Assume Responsibility For The Due Amount

Bitvavo has blamed DCG for its inability to access the funds. A spokesperson for Bitvavo said that they had held talks with various group entities. They said that with the mingling inside the group, they felt that DCG should assume responsibility for the due amount.

The exchange has stated that they hope to reimburse given time though they claimed they had adequate funds against the assets of their customers. The exchange has also said that its clients were covered and had the option of withdrawing their investments whenever they desired.

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DCG officials have stated that all accounts in focus were at Genesis and not at DCG. They further said that Genesis only holds the necessary regulatory license in America and that Genesis was only an autonomous subsidiary.

Bitvavomanages close to $1.7 billion in digital assets and bitcoins. The massive fund outflow from exchanges has led to Binance facing a fall in liquidity. The crypto exchange has the biggest trading volume of all.

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