You must have noticed that Bitvavo has had problems with an important partner in the past period. It is possible to stake crypto on the Bitvavo platform, but that part of the service has been outsourced to the American company Genesis, which is a sister company of the Digital Currency Group. Genesis manages approximately EUR 280 million in Bitvavo assets, but is currently in serious financial trouble.
Bitvavo expects to get 80 to 100 percent of its money back
Of the 280 million euros that Bitvavo placed with Genesis, 70 percent will in any case be returned. That has been on paper since the beginning of 2023. This means that Bitvavo will receive 196 million euros back, but that there is still uncertainty about the remaining 84 million euros. Bitvavo previously indicated that it fully guarantees the remaining amount, so that users of the platform do not have to worry in principle.
That does not alter the fact that 84 million euros is a gap that even a large exchange party such as Bitvavo does not just put on the table. In any case, it is not a really good development for the Dutch stock exchange platform. They will be very disappointed with the choice to outsource the strike services to Genesis.
For the remaining 30 percent of the outstanding amount, there now seems to be light at the end of the tunnel. “In recent times, the remainder has been discussed. The result submitted to the court amounts to an expected recovery rate of between 80 and 100 percent which will be paid back in DCG digital currencies, cash and preferred stock. Further details will be announced shortly,” Bitvavo said in a statement new statement.
Tomorrow or the day after tomorrow we will know more
Although it is a positive development that there is now at least clarity for the exchange platform, the result is not optimal. In particular, the idea that Bitvavo will receive preferred shares in the Digital Currency Group as part of the repayment is not very attractive. Especially since that party is currently experiencing problems on several fronts.
The outline agreement now reached will be published today or tomorrow. After that we know exactly how the proverbial fork in the stem is. The intention is then to further elaborate the agreement in a Plan Support Agreement, which will then be submitted to a committee of creditors.
Bitvavo is on this committee and will review the proposed plan “for the benefit of all creditors”. If the committee approves, the bankruptcy judge signs the plan and repayments begin. So there will soon be more clarity about the financial health of Bitvavo.