On 16 December, Bitvavo, a Dutch cryptocurrency exchange, stated that its 280 million euros ($296.30 million) were sealed at Digital Currency Group (DCG).
- Digital Currency Group is currently facing a liquidity issue.
- DCG clarifies that its customers can withdraw their funds at any time.
- Bitvavo managed EUR 1.6 million out of EUR 2.8 million.
Bitvavo clarified by its Tweet that it had become one of the leading European exchanges thanks to its responsible approach towards digital assets and the resulting trust of its customers.
Bitvavo mentioned, “If needed, Bitvavo will step in to protect our customers.”
DCG Liquidity issue-
DCG is a venture capital company with seven subsidiaries: Luno, Coindesk, Grayscale Investment, Genesis, HQ, Tradeblock and Foundry.
Bitvavo described that it had given money to DCG to offer BItvavo’s customers a facility where customers are able to earn interest by depositing cryptocurrency tokens.
“DCG is currently experiencing liquidity problems … As a result, DCG has suspended repayments until this liquidity issue has been resolved,” the Dutch firm said on its blog.
During the Sam Bankman-Fried company collapse, DCG’s subsidiaries, including
major cryptocurrency lender Genesis Global Capital froze its withdrawals in November due to the following event.
DCG stated that it has not impacted Bitvavo’s platform and added that Bitvavo could continue to offer the services its customers seek.
Bitvavo believed that DCG would repay all the locked funds over time and said that DCG has enough funds to “prefund any locked assets at DCG.” And DCG also clarified that Bitvavo’s customers hadn’t been exposed to DCG’s liquidity issue, and customers can withdraw their funds any time they want.
To prevent money laundering on Bitvavo’s platform, Bitvavo’s as a digital assets services provider registered with the Dutch central bank (DNB). But it is not subject to prudential supervision by either the DNB or the Netherlands’ Financial Markets Authority (AFM).
DCG added, “Bitvavo has been making a profit since its inception and is in a financially solid position. In the unlikely event that the situation at DCG will change, Bitvavo will step in to protect its customers. DCGs debt will not create an obstacle for Bitvavo to fulfill this obligation.”