Digital Currency Group and its affiliates (DCG) cited liquidity issues as they suspended redemptions and temporarily prevented users from withdrawing their funds.
Digital Currency Group and its subsidiaries (DCG), which manage Bitvavo’s $296.7 million in deposits and digital assets for off-chain staking services, have suspended redemptions, citing liquidity concerns amid the market bearish. However, Bitvavo has announced that it will pre-fund locked assets to avoid any DCG-related service disruptions for users.
As users proactively explore self-custody options as a way to protect their funds, an acute liquidity crunch is set to loom over exchanges. DCG cited liquidity issues as it suspended refunds and temporarily blocked users from withdrawing their funds. Bitvavo, on the other hand, has decided to pre-fund the locked assets to ensure that none of its users face DCG liquidity issues.
“The current situation at DCG has no impact on the Bitvavo platform,” the announcement reads, as the company does not guarantee its users any interruption of service. According to Bitvavo, DCG intends to share a plan to repay outstanding deposits over time.
Additionally, Bitvavo says DCG’s debt will not negatively impact day-to-day operations as the company has been “profitable since inception and is in a strong financial position.” The company continued to calm the status quo even as DCG failed to hold up its end of the bargain.
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Bitvavo manages nearly $1.7 billion in deposits and digital assets that can be held 1:1 and fully redeemed by users.
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