Dutch Bitcoin Exchange Bitvavo Alleges Digital Forex Group Is Obtaining ‘Liquidity Problems’

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Dutch cryptocurrency trade Bitvavo claims it has 280 million Euros ($297 million in USD) trapped with Digital Currency Group (DCG), or 17.5% of the $1.6 billion Euros Bitvavo suggests it manages in deposits and other belongings. Bitvavo certain customers that the problem “does not have any effects on the Bitvavo system.”

Bitvavo promises in a website put up that DCG is “experiencing liquidity complications because of to the existing turbulence in the cryptomarket” and that DCG “has suspended repayments until eventually this liquidity challenge has been fixed.”

But a DCG spokesperson explained to Reuters that the cash are held by its “independent subsidiary” Genesis, not DCG. Decrypt has reached out to DCG for further more comment. 

Bitvavo retorted to Reuters that it “held DCG accountable for the inaccessible resources.”

DCG, headed up by SecondMarket founder Barry Silbert, is one of the crypto world’s most significant and ideal-recognized crypto companies. It owns Genesis, Grayscale, CoinDesk, Foundry, and Luno. 

The five weeks since FTX’s collapse and personal bankruptcy submitting have not been excellent to DCG.

Genesis froze withdrawals on its lending arm just one thirty day period in the past and has not unfrozen them. Gemini, the trade owned by the Winklevoss brothers (not a DCG subsidiary), in flip had to pause redemptions on its Get paid product mainly because its lover on Gemini Generate is Genesis. Genesis reportedly owes Gemini Get paid consumers $900 million. 

The troubles at Genesis have place the finances of DCG into query. 

On November 22, Silbert told shareholders that DCG owes Genesis $575 million but that, “We have weathered past crypto winters, and while this a person may possibly truly feel far more intense, collectively we will arrive out of it stronger.” However on December 3, the Fiscal Situations reported DCG owes Genesis $1.7 billion

Grayscale Money also faces considerable headwinds, with New York hedge fund Fir Tree Funds Administration submitting a lawsuit against the enterprise alleging its Grayscale Bitcoin Trust (GBTC) experienced “potential mismanagement and conflicts of curiosity.”

The Grayscale Bitcoin Have confidence in is a fund that enables investors to obtain exposure to Bitcoin with out obtaining Bitcoin by themselves. It presently trades at a lower price of -48.7% when compared to the industry value of the fundamental asset, per facts from CoinGlass.

On Friday, crypto analyst Will Clemente, co-founder of Reflexivity Analysis, famous on Twitter an intense selloff in the past 48 several hours of several cryptocurrencies tied to DCG, speculating it could be DCG seeking for liquidity. 

Filecoin and Movement, both equally of which Clemente claimed DCG has publicity to, have dropped all over 20% and 10% in the earlier 24 hours in accordance to CoinGecko info.

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