Bitvavo Rejects DCG's 70% Debt Repayment Offer
The cryptocurrency exchange Bitvavo, which is a significant creditor of the financially challenged cryptocurrency startup Digital Currency Group (DCG), has rejected DCG's proposal of partial debt recovery.
On January 11, 2019, Bitvavo made an official announcement stating that the company had received a counter proposal from DCG, which offered to refund about 70 percent of the total sum owed on terms that were agreeable to Bitvavo.
DCG is only prepared to return a portion of the loan within a time frame that is acceptable to Bitvavo, thus negotiations over the remaining balance amount are currently ongoing with this party.
Bitvavo has highlighted that the present scenario involving DCG does not have any influence on the company's clients, platform, or services. Bitvavo provides a guarantee for the remaining balance and has thereby assumed the risk that was previously borne by its consumers.
The statement came shortly after Bitvavo made the decision to pre-fund around $290 million in assets locked on DCG so that it would no longer be dependent on the struggling company. The Dutch cryptocurrency exchange said that it has sufficient capacity to continue providing service to its clients without any interruptions.
Despite the fact that DCG is facing a severe liquidity difficulty in the midst of the bear market, the exchange anticipates that it will be able to refund overdue sums. In their most recent statement, Bitvavo noted a scenario that was very similar to the one that the crypto exchange Gemini, which is owned by the Winklevoss brothers, was experiencing.
On January 10, Cameron Winklevoss sent a public letter to the board of directors of DCG, in which he accused CEO Barry Silbert of fraud and demanded that Silbert be replaced in his position as CEO.
After the failure of the FTX cryptocurrency exchange in November 2022, a significant contagion spread across the market, causing big corporations like as DCG and Genesis to be adversely impacted.
It was announced that the Department of Justice of the United States had begun an investigation into DCG in conjunction with the Securities and Exchange Commission, the situation grew even more dangerous for the company.