Bitvavo Claims DCG Has Liquidity Issues, Exchange Funds Unaffected

Bitvavo Claims DCG Has Liquidity Issues, Exchange Funds Unaffected

As the fallout from the FTX implosion continues to unfold across the pond, DCG Group is also said to be dealing with liquidity issues and has halted repayments “until liquidity issues have been resolved.”

The DCG Group, a “strategic investor” that leverages its connections to turn a profit on the market for its clients, also provides services to third parties who can offer access to DCG’s network to retail investors.

Domino Effect

Bitvavo – a crypto exchange platform based in the Netherlands – is one of the third parties currently exposed to the halting of repayments from DCG. Fortunately for Bitvavo’s customers, DCG’s issues will not affect Bitvavo customers, according to a spokesperson for the Dutch platform.

In a statement published on their blog, Bitvavo reassured anxious clients that despite business dealings worth 280 million EUR with the DCG Group, Bitvavo has been on the green ever since the platform was founded. All assets locked in with DCG can be refunded in case a Bitvavo customer wishes to withdraw from an investment.

“The current situation at DCG does not have any impact on the Bitvavo platform. Bitvavo will continue to offer the services that our customers expect from us. Bitvavo has been making a profit since its inception and is in a financially solid position. […] Bitvavo will step in to protect its customers. DCG’s debt will not create an obstacle for Bitvavo to fulfil this obligation.”

DCG Exposure Limited To Experienced Users

As a full-reserve exchange and crypto custodian, Bitvavo states that all customer funds are held by Bitvavo alone unless explicitly instructed otherwise by the owner of the funds.

As a result, the assets staked off-chain with the DCG Group were only invested with DCG once customers were informed. Furthermore, off-chain staking is disabled by default on the Bitvavo platform, meaning customers must willingly enable the option before being able to invest.

The current market situation has unfortunately taken a toll on Bitvavo, too – due to current market conditions, Bitvavo has also announced that they will be revising the staking rates offered to clients in 2023. Customers of the platform can withdraw their funds at any time, subject to the platforms’ T&C, should the new staking rates turn unappealing.

The post Bitvavo Claims DCG Has Liquidity Issues, Exchange Funds Unaffected appeared first on CryptoPotato.

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