Dutch BTC exchange Bitvavo facing liquidity issues

Digital Currency Group's (DCG) primary subsidiary, Genesis, has yet to recover from liquidity issues that cause withdrawal freezes on its own lending division. As the final quarter of 2022 comes to an end, Bitcoin prices are at high discounts.

However, there are more things to understand regarding DCG and the Dutch crypto exchange, Bitvavo, which is experiencing liquidity issues. Can they recover and help BTC prices rise in the following weeks to the new year? 

Turbulence in the crypto market affecting Bitvavo

Bitvavo stated that they have around 280 million Euros or $297 million on DCG’s books that have yet to be liquidated as of this time of writing. Around 17.5% of the $1.6 billion in their current asset lineup are all placed in either deposits or other assets. 

While all these have been going on, Bitvavo assure users that this won’t heavily impact the platform in any way. In a blog post, Bitvavo claimed that DCG is currently undergoing major liquidity problems because of the high turbulence of the market. 

There were also claims that DCG halted all repayments until this issue was resolved. However, a DCG spokesperson told news agency Reuters, that the funds that are held will be its own independent subsidiary called Genesis and not DCG itself. According to Reuter’s report, Bitvavo held DCG accountable for the inaccessible funds caused by the liquidity problem. 

DCG is one of the world’s largest cryptocurrency firms and it currently owns Genesis, CoinDesk, and Luno. In the five weeks of the FTX downfall and bankruptcy, things didn’t pan out well for DCG but reassured users that this won’t be permanent moving forward.

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Bitvavo aiming to recoup over $200 million from DCG

As mentioned, Genesis froze the held assets in November 2022 after the big FTX collapse. In a letter from the firm to numerous investors and clients, they are planning to preserve these assets to ensure that the value won’t plummet any further if a crash does occur. 

On November 11, 2022, FTX filed for bankruptcy that left a value of 1 million investors encountering losses that equate to billions of dollars in the crypto market. This crash echoed across the market that sent BTC and other crypto plummeting in value. 

Bitvavo also stated that users should expect reimbursement in due time if it had enough assets to cover for the damages caused. Representatives also said that the users will not be exposed to any negative outcomes from the frozen assets as they are expected to be withdrawn over time when the case cools off. 

The crypto world may be experiencing its 'winter' for the past few months, but this can quickly change in 2023. If you want the latest updates about general crypto news and play the best Bitcoin casino games, be sure to visit Gamdom for updated news about the crypto market. 

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Words: Vonn Consul