The problems for Bitvavo are an indirect result of the fall of the American FTX, a very large cryptocurrency exchange. It ran into trouble last month after about 10 billion turned out to be missing. CEO Sam Bankman-Fried has since been arrested on fraud and money laundering charges.
280 million
As FTX could no longer meet its payment obligations, other parties also had problems, such as DCG, which Bitvavo is doing business with again.
The 280 million crypto coins are hosted with DCG, because they are used there for a process called off-chain staking. With this, the capital is in fact used to make the blockchain more reliable, for which the owner of the crypto receives a fee.
“The Money Will Come Back”
At the moment, DCG is unable to issue refunds due to “liquidity issues resulting from the current turbulence in the cryptocurrency market,” writes Bitvavo. “Bitvavo is in active talks with DCG, along with other DCG corporate clients. It is anticipated that outstanding deposits will be refunded by DCG in due course.”
According to the Dutch cryptocurrency exchange, customers need not worry about seeing their money go up in smoke. The company claims it has enough money to pay everyone.
