Bitvavo confirms Digital Currency Group’s liquidity problems

The exchange used DCG services to provide off-chain staking services

19.12.2022 - 10:00

1290

2 min

What’s new? Cryptocurrency exchange Bitvavo reported the inability to use its own funds of 280 million EUR (about $297 million) due to liquidity problems of Digital Currency Group (DCG) and its affiliates. However, the platform assured that the situation will not affect the stability of providing services to users. The exchange’s representatives reported on the blog.

Message on the Bitvavo blog

Bitvavo exchange was launched in 2018 in Amsterdam. There are 171 coins and 180 trading pairs available on the platform. As of December 2022, Bitvavo manages deposits and digital assets worth 1,6 billion EUR (about $1,7 billion).

What else is known about the incident? Bitvavo used DCG’s services to provide off-chain staking services to its customers. The exchange team noted that DCG is currently experiencing liquidity problems due to market volatility and has suspended payments until the situation normalizes.

DCG plans to present a refund plan soon. If this is not done, Bitvavo promises to respond to the situation. In addition, the exchange stressed that Bitvavo’s financial situation remains stable and that the platform’s customers can withdraw their funds at any time.

Earlier, broker Bernstein offered three options to solve the financial problems of digital asset management company Grayscale Investments, part of DCG. They include raising capital, selling non-strategic assets, or liquidating the bitcoin trust, GBTC. The third option is seen as the least preferred.

In early December, the media reported that crypto broker Genesis, part of DCG, owed $1,8 billion to several lender groups.

For what Genesis’ liquidity crisis threatens the crypto market, read GetBlock Magazine’s article.

Author: