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DCG suspends repayments citing liquidity issues

Bitvavo suspends repayments citing liquidity problems

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TL;DR

  • DCG temporarily halts users from withdrawing their funds
  • The crypto company cites the suspension was due to liquidity issues
  • Bitvavo assures users that their funds are redeemable

Digital Currency Group, which manages $296.7 million (280 million euros) in deposits and digital assets for off-chain staking services, recently experienced liquidity issues due to the bear market, halting payouts as a result. Fortunately, Bitvavo, its affiliate crypto platform, is taking proactive measures by prefunding the locked assets so that DCG’s service interruption does not disrupt users.

DCG cites liquidity problems as it suspended repayments 

Bitvavo suspends repayments citing liquidity problems 2

As users search for self-custody solutions to protect their capital, an acute liquidity crisis is predicted to plague exchanges. DCG suspended payments due to liquidity constraints, preventing customers from accessing their funds. In contrast, Bitvavo took preemptive measures and prefunded the locked assets so that its clients would not experience any of DCG’s difficulties with liquidity.

Despite the current circumstances at DCG, Bitvavo guarantees that there will be no interruption in service for their users. The company also declared that DCG is determined to devise a strategy that reimburses all outstanding deposits gradually over time. Hence, customers need not worry about any potential disruption of services provided by Bitvavo due to this issue.

Bitvavo assures users that their money is redeemable

Bitvavo is strong and confident that any failure by DCG to uphold its contractual obligations will not affect Bitvavo’s day-to-day operations. Considering the company has been profitable since its inception, it sits in a solid financial position. 

With nearly $1.7 billion (1.6 billion euros) held 1:1 as deposits and digital assets, users can rest assured their money is redeemable at all times by them alone should they choose to do so.

Binance, the crypto exchange with the highest trading volume, also faced a liquidity crisis as substantial funds were withdrawn from exchanges.

According to Nansen technician Andrew Thurman, the drop in liquidity may have been partially caused by large market makers exiting the exchange.

Bitvavo is registered with the Dutch central bank (DNB), working to prevent any money laundering on its platform. However, neither the DNB nor Netherlands’ Financial Markets Authority (AFM) monitors it under prudent supervision.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Damilola Lawrence

Damilola is a crypto enthusiast, content writer, and journalist. When he is not writing, he spends most of his time reading and keeping tabs on exciting projects in the blockchain space. He also studies the ramifications of Web3 and blockchain development to have a stake in the future economy.

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