Dutch crypto exchange Bitvavo says Digital Currency Group (DCG) is withholding hundreds of millions of dollars from it due to liquidity issues.
In a recent company statement, Bitvavo said that DCG, which provides off-chain share services to Bitvavo, is suspending redemptions until the liquidity crisis is resolved.
Bitvavo says the DCG issues should not affect its platform.
“DCG is currently experiencing liquidity issues due to the current turbulence in the crypto market. As a result, DCG has suspended repayments until this liquidity issue is resolved…
The current situation at DCG has no impact on the Bitvavo platform.”
According to Bitvavo, which has 1.6 billion euros worth of crypto assets, DCG is expected to pay back about $280 million in debt over time. The crypto exchange also states that it will not stop customer withdrawals due to DCG’s default.
“All deposits and digital assets of Bitvavo’s customers can be withdrawn immediately and at any time … DCG’s debt will not constitute an obstacle for Bitvavo to meet this obligation.”
However, Bitvavo states that they may have to change how their offline betting services work in the future, saying that they no longer believe the market is stable enough to provide adequate shares.
“Due to current market conditions and to protect our customers, off-chain betting rates will be reviewed in the first quarter of 2023.
While we understand that future on-chain staking reward adjustments affect Bitvavo customers, we have come to the conclusion that there is currently no longer a significant or stable enough market to offer current rewards that meet our standards.
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