All eyes are still on the situation at lending platform Genesis and parent company Digital Currency Group (DCG). The issue is also important in the Netherlands because Bitvavo still has to receive money from the American parties. It now appears that Genesis still has at least $3 billion in outstanding debt and DCG is considering radical steps to bring the debt crisis to an end.
Crypto platform has billions in debt
Genesis owes over $3 billion to a nice amount of different creditors, that stated the Financial Times recently. Genesis ran into financial difficulties after other crypto companies in which they had interests, such as ftxwent bankrupt.
DCG, as the parent company of Genesis, is now trying to salvage the situation by desperately looking for money. One of the ways DCG hopes to do this is by selling a portfolio worth at least $500 million.
This portfolio includes shares in companies such as Dune Analytics, Etherscan, Coinbase, Kraken and Circle. In total, this concerns more than 200 different companies, according to the Financial Times.
However, according to the same report from the newspaper, it will take some time before this portfolio can be sold, and the $500 million can therefore be used to close the gap at Genesis. In addition, of course, it is not a final solution, because Genesis owes much more than $500 million.
Bitvavo as creditor
Few will have missed that Bitvavo as a bystander has also been affected by the debt crisis at Genesis and DCG. The Dutch exchange will certainly receive $280 million from DCG, but the question remains whether the American party will be able to repay this amount.
That would obviously be a major blow to Bitvavo. After all, the amount represents a significant part of their total assets under management. Nevertheless, Bitvavo continues to reiterate that they will easily keep their heads above water in any conceivable scenario. Bitvavo would have enough resources of its own to absorb any gap. In addition, Bitvavo remains confident that sooner or later they will receive the money back from DCG.
Read one here short summary about the whole situation at Bitvavo.
Last week it was announced that DCG was trying to close a deal with Bitvavo, where they offered to repay 70% of the outstanding debt and settle the remaining debt. Bitvavo went not agreed with this proposal.
It was recently announced that Genesis, together with crypto exchange Gemini, is being sued by the US Securities and Exchange Commission (SEC).