As the fallout from the FTX implosion continues to play out across the pond, DCG Group is also said to be dealing with liquidity issues and has halted redemptions “until liquidity issues have been resolved.”

DCG Group, a “strategic investor” that leverages its connections to generate market gains for its clients, also provides services to third parties that may offer retail investors access to DCG’s network.

Domino effect

Bitvavo, a Netherlands-based crypto exchange, is one of the third parties currently exposed to the suspension of DCG payments. Fortunately for Bitvavo customers, the DCG issues will not affect Bitvavo customers, according to a spokesperson for the Dutch platform.

In a statement posted on its blog, Bitvavo assured eager clients that despite €280 million worth of deals with DCG Group, Bitvavo has been in the green since the platform was founded. All assets locked up with DCG can be redeemed in the event that a Bitvavo client wishes to withdraw from an investment.

“The current situation in DCG does not have any impact on the Bitvavo platform. Bitvavo will continue to offer the services that our clients expect from us. Bitvavo has been making a profit since its inception and is in a strong financial position. […] Bitvavo will step in to protect its customers. DCG’s debt will not create an obstacle for Bitvavo to meet this obligation.”

DCG exposure limited to experienced users

As a full reserve exchange and cryptocurrency custodian, Bitvavo claims that all customer funds are held solely by Bitvavo, unless otherwise explicitly stated by the owner of the funds.

As a result, assets staked off-chain with DCG Group were only invested with DCG once clients were informed. Additionally, off-chain participation is disabled by default on the Bitvavo platform, which means that clients must voluntarily enable the option before they can invest.

Unfortunately, the current market situation has also affected Bitvavo: Due to the current market conditions, Bitvavo has also announced that it will review the participation rates offered to clients in 2023. Clients of the platform can withdraw their funds at any time. . subject to the platforms terms and conditions, in case the new participation rates become unattractive.

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This post Bitvavo claims that DCG has liquidity problems, exchange funds are not affected

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