Dutch Bitcoin exchange Bitvavo said it had rejected Digital Currency Group’s (DCG) proposal to repay 70% of Genesis Trading’s debt, arguing that it should be able to pay back the entirety of locked funds.
Last month, the Dutch exchange revealed it had €280 million ($297 million) stuck with Genesis, holding its parent company DCG accountable for the funds. In its latest blog post, Bitvavo said that on January 9 DCG made a proposal offering to refund 70% of the outstanding amount in a period acceptable to the Dutch exchange.
Per the exchange, “the latter is not acceptable because DCG has sufficient funds available for full repayment.”
Bitvavo is the Netherlands’ leading crypto exchange with a trading volume of more than $46 million in the past 24 hours, per CoinGecko.
Although DCG maintained the funds are held by its “independent subsidiary” Genesis, not DCG itself, the firm now appears to be willing to find a solution, with Bitvavo confirming active conversations with DCG to recover the resulting debt “as soon as possible.”
The exchange has also been adamant that recent events won't affect its users.
“As consistently stated before, the current situation regarding DCG does not impact Bitvavo's customers, its platform and its services. Bitvavo has guaranteed the outstanding amount and thus assumed the risk on behalf of its customers,” Bitvavo said in yesterday’s blog post.
The Dutch exchange also weighed in on the ongoing feud between DCG and Gemini, citing the New York-based exchange’s open letter that accuses DCG boss Silbert of deception and fraud and calls for his resignation.
“Like Gemini, we share the confidence that a solution can be found to the satisfaction of all concerned,” said Bitvavo.
A Bitvavo spokesperson told Decrypt there was nothing else the exchange could disclose beyond what’s stated in the blog. DCG and Genesis did not immediately respond to Decrypt’s request for comment.
Bitvavo piles on Genesis, DCG
Genesis froze withdrawals from its lending arm on November 18, 2022, blaming FTX’s collapse for “abnormal withdrawal requests” that exceeded its liquidity.
In a consequent letter to shareholders, DCG CEO Barry Silbert revealed the crypto conglomerate owed its own Genesis Trading arm as much as $575 million worth of intercompany loans due in May 2023. Additionally, DCG owes Genesis $1.1 billion on a promissory note due in June 2032 related to the default of Three Arrows Capital.
Per a Reuters November report, aside from the money owed to Genesis, DCG’s only debt was a $350 million credit facility from a small group of lenders led by investment firm Eldridge, with Silbert saying at the time the firm was still on pace to do $800 million in revenue last year.
There were more woes for Genesis in the past few weeks though, with the firm announcing a 30% cut to its workforce at the beginning of January, and Federal prosecutors in New York, along with the SEC, launching an investigation into DCG’s internal transfers with its lending subsidiary.