Cryptocurrency exchange Bitvavo, a major creditor of the troubled crypto company Digital Currency Group (DCG), has dismissed DCG’s proposal of partial debt repayment.
Bitvavo officially announced on Jan. 11 that the firm received a counter proposal from DCG offering to repay about 70% of the outstanding amount in a term acceptable to Bitvavo.
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 emphasized that the current situation regarding DCG has no impact on Bitvavo’s customers, platform, or services. “Bitvavo guarantees the outstanding amount and has thus taken over the risk from its customers,” the firm noted.
The announcement came soon after Bitvavo decided to pre-fund about $290 million in assets locked on DCG to avoid reliance on the troubled firm. The Dutch crypto exchange said it had enough resources to continue serving its customers without disruption. The exchange expects DCG to refund outstanding balances, despite the latter experiencing a massive liquidity crisis amid the bear market.
In the latest statement, Bitvavo mentioned a similar situation faced by the Winklevoss brothers’ crypto exchange, Gemini. On Jan. 10, Cameron Winklevoss wrote a public letter to the DCG board, accusing CEO Barry Silbert of fraud and calling for the replacement of Silbert as CEO. With DCG and its crypto lending subsidiary Genesis Capital owing Gemini $900 million, the Gemini founders are confident that there’s still a possibility of a positive solution to the satisfaction of all parties involved.
“Like Gemini, we share the confidence that a solution can be found to the satisfaction of all involved,” Bitvavo noted.
DCG and Genesis are among the major crypto industry companies affected by the massive contagion following the collapse of the FTX crypto exchange in November 2022. The situation became more precarious for DCG after the United States Department of Justice reportedly launched an investigation against the firm in cooperation with the Securities and Exchange Commission.
On Jan. 10, DCG’s Silbert wrote a public letter to shareholders defending his decisions and providing details of several loans from Genesis and relationships with firms like Three Arrows Capital.