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Bitvavo – a Netherlands-based crypto exchange – is unhappy with Digital Currency Group (DCG)’s proposed plan to compensate Genesis’s troubled creditors.
While DCG has offered to recover 70% of funds owed to such firms, Bitvavo has deemed the plan unacceptable.
Pay it All Back, Says Bitvavo
In a statement from Bitvavo on Tuesday, the exchange claimed that DCG “has sufficient funds available for full repayment.” As such, its offer to repay just 70% of debts “in a period acceptable to Bitvavo” was called “not acceptable” for creditors.
“Bitvavo, along with other creditors and advisors, is actively engaged in conversations with DCG to recover the resulting debt as soon as possible,” said the company.
The Dutch crypto exchange is the largest within its country, generating about $51 million of trading volume within the last 24 hours, per data from CoinGecko. Last month, the exchange revealed that it had exposure to Genesis to the tune of €280 million, holding DCG responsible for paying them back.
According to Genesis, the trading firm has received backup from its parent company in the past to remain financially stable. For example, after losing money within Three Arrows Capital in June, Genesis said that DCG has “assumed certain liabilities of Genesis” to stay functional long-term.
However, Gemini co-founder Cameron Winklevoss released a statement on Tuesday claiming that Genesis had never actually received such aid. He also accused DCG CEO Barry Silbert of defrauding Gemini, and called on the executive to step down from his leadership position.
Bitvavo partly echoed Winklevoss’s wishes:
“Gemini expresses confidence that, provided DCG’s management is being replaced, there is still the possibility for a positive, out-of-court structured solution to the satisfaction of all parties concerned,” read the exchange’s statement. “Like Gemini, we share the confidence that a solution can be found to the satisfaction of all concerned.”
Bitvavo clarified that its debacle with DCG has no impact on its customer’s funds, assuming all risk on their behalf.
Woes of DCG
Ever since FTX’s collapse, Genesis has reportedly been teetering on the edge of bankruptcy. Within weeks of the fallout, Genesis was unable to secure $1 billion in emergency loans from external creditors.
Meanwhile, Grayscale (GBTC) – the world-leading Bitcoin trust also owned by DCG – has reached a record-low discount against its net asset value. The company owns $15.94 worth of BTC per share. However, the market price of its shares today is a mere $9.88 – a 39% discrepancy.
Genesis announced a 30% cut to its workforce at the start of the year. SCG was struck by probes by the DOJ and SEC shortly afterward regarding internal transfers between each firm.