Bitvavo claims DCG has liquidity issues, and the exchange-traded funds are not affected

With the fallout from FTX’s implosion continuing across the pond, DCG is also said to be dealing with liquidity issues and has held payments “until the liquidity issues are resolved.”

DCG Group, a “strategic investor” who leverages its connections to make a profit in the market for its clients, also provides services to third parties that can provide access to the DCG network to retail investors.

Domino effect

Bitvavo – a Netherlands-based crypto exchange – is one of the third parties currently affected by the suspension of DCG refunds. Fortunately for Bitvavo customers, the DCG issues will not affect Bitvavo customers, according to a spokesperson for the Dutch platform.

In a statement posted to their blog, Bitvavo assured worried customers that despite €280 million worth of business deals with DCG Group, Bitvavo has been in the green since the platform was founded. All assets locked by DCG can be redeemed if the Bitvavo customer wishes to withdraw from the investment.

“The current situation in DCG has no impact on the Bitvavo platform. Bitvavo will continue to provide the services our customers have come to expect from us. Bitvavo has been profitable since its inception and is in a stable financial position. […] Bitvavo will step in to protect its customers. DCG debt will not be an obstacle for Bitvavo to fulfill this commitment.”

DCG exposure is limited to experienced users

As a full-fledged reserve exchange and crypto custodian, Bitvavo states that all customer funds are solely owned by Bitvavo unless otherwise expressly directed by the owner of the funds.

As a result, off-chain assets with DCG Group were first invested with DCG when clients were informed. Additionally, off-chain staking is disabled by default on the Bitvavo platform, meaning customers will have to enable the option before they can invest.

Unfortunately, the current market situation has also affected Bitvavo – due to the current market conditions, Bitvavo has also announced that it will revise the stock prices offered to clients in 2023. Clients on the platform can withdraw their funds at any time, subject to the platforms terms and conditions, if the new input rates become unattractive.

Bitvavo Claims DCG Has Liquidity Problems, Exchange Traded Funds Unaffected appeared first on CryptoPotato.

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