Dutch crypto exchange Bitvavo says that Digital Currency Group (DCG) is withholding hundreds of millions of dollars from it due to liquidity issues.
In a recent company statement, Bitvavo says that DCG, which provides off-chain staking services to Bitvavo, is suspending repayments until the liquidity crisis it’s facing is resolved.
Bitvavo says that DCG’s issues should have no impact on its platform.
“DCG is currently experiencing liquidity problems due to the current turbulence in the crypto market. As a result, DCG has suspended repayments until this liquidity issue has been resolved…
The current situation at DCG does not have any impact on the Bitvavo platform.”
According to Bitvavo, which holds $1.6 billion worth of Euros in crypto assets, it is expected that DCG repays its debt of about $280 million back over time. The crypto exchange also notes that it will not be halting 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“All deposits and digital assets of Bitvavo’s customers can be withdrawn immediately and at any time… DCG’s debt will not create an obstacle for Bitvavo to fulfill this obligation.”
However, Bitvavo notes that they may have to change how their off-chain staking services work in the future, saying they no longer believe the market is steady enough to provide adequate staking rewards.
“Due to current market conditions and to protect our customers, off-chain staking rates will be revised in Q1 2023.
While we understand adjusting future off-chain staking rewards impacts Bitvavo customers, we have concluded that there is currently no longer a sufficiently significant or stable market to offer the current off-chain staking rewards in a way that meets our standards.”
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