Bitvavo, said that it has rejected Digital Currency Group’s (DCG) proposal to repay 70 per cent of Genesis Trading’s debt.
On January 11, Bitvavo formally disclosed that the company had received a counteroffer from DCG that offered to pay back roughly 70% of the outstanding balance over a period that Bitvavo could accept.
The remaining balance amount is still under negotiation with DCG, as it is only ready to repay part of the debt within a term acceptable for Bitvavo, the exchange said, adding:
“As creditors, we do not find the latter acceptable because DCG has sufficient resources available for full repayment.” Bitvavo stressed that its consumers, platform, and services are unaffected by the present DCG issue. The firm noted:
“Bitvavo guarantees the outstanding amount and has thus taken over the risk from its customers,”
The announcement followed Bitvavo’s quick decision to pre-fund $290 million in assets that were locked on DCG in order to reduce its reliance on the problematic company.
The Dutch cryptocurrency exchange claimed it had adequate capacity to keep providing uninterrupted customer service. Even though DCG is going through a severe liquidity issue as a result of the bear market, the exchange anticipates that DCG would reimburse any outstanding amounts.
The Winklevoss brothers’ cryptocurrency exchange, Gemini, was in a similar predicament, according to Bitvavo’s most recent statement. Cameron Winklevoss accused CEO Barry Silbert of fraud in a letter to the DCG board on January 10 and demanded Silbert be fired.
The $900 million that DCG and its cryptocurrency lending affiliate Genesis Capital owe Gemini gives the Gemini founders hope that a satisfactory resolution can yet be reached.
“Like Gemini, we share the confidence that a solution can be found to the satisfaction of all involved,” Bitvavo noted.
Following the collapse of the FTX cryptocurrency exchange in November 2022, big companies in the crypto sector DCG and Genesis are among those severely impacted.
After the Securities and Exchange Commission and the US Department of Justice allegedly opened an investigation into DCG, the company’s situation apparently got worse.
DCG’s Silbert defended his choices in a letter to shareholders on January 10 that was made public, including various loans from Genesis and connections to companies like Three Arrows Capital.
