Dutch crypto exchange Bitvavo claimed to have received an offer from Digital Currency Group (DCG) on January 9 to repay 70% of its debt within an acceptable period.
However, the company declined the offer citing that the crypto conglomerate has sufficient funds for a full refund.
- The development comes days after the trading platform revealed it was actively engaged in conversations with DCG to collect the resulting debt with other creditors and advisers.
- The official statement read,
“The residual amount is still under discussion with DCG as they are only ready to repay part of it within a time period acceptable to Bitvavo. As creditors, the latter is not acceptable as DCG has sufficient funds for a complete refund.
- Digital Currency Group is currently under investigation by the US Department of Justice’s Eastern District of New York as well as the Securities and Exchange Commission (SEC). The focus is on internal transfers between the company and its struggling subsidiary – crypto lending firm – Genesis Global Capital.
- The current financial distress has been spurred on by Genesis becoming one of the companies affected by the FTX contagion.
- It halted withdrawals on Nov. 16, citing liquidity issues, and has been involved with investment bank Moelis & Company for restructuring purposes.
- It was reported earlier than Genesis must $900 million to crypto exchange Gemini. The two platforms jointly operated a product called Gemini Earn, which allowed users to earn 8% interest on their loans.
- Gemini also accused DCG of failing to reimburse Genesis, which, in turn, resulted in failed payments to its customers.
- Since the outcome, Barry Silbert, the head of DCG, has suffered enormous backlash. Cameron Winklevoss, the co-founder of Gemini, claimed that Silbert did not want to find a solution and even request that the Board remove him from his position as CEO.