A Dutch cryptocurrency exchange by the name of Bitvavo issued an update on Sunday concerning $280m worth of consumer funds, which the company is attempting to retrieve from Digital Currency Group (DGC), a US-based entity, and its operators.
Bitvavo said that the money was handed to DGC subsidiary Genesis Global Capital to enable the exchange to offer interest on cryptocurrency tokens.
Since Genesis froze withdrawals in November due to FTX’s collapse, funds have been locked with many fearing that they will never be able to access their coins.
Genesis has assured that it is working on a plan to unfreeze withdrawals and let every customer access their funds.
However, FTX’s bankruptcy has now left around one million investors accumulating losses running into the billions.
Bitvavo is not tying up its customer funds to Genesis’, as the exchange said that its customers will be allowed to cash out their funds as they see fit and, for its part Bitvavo would expect to be reimbursed by Genesis instead.
DGC said over the weekend that it had no access to the funds, but it was Genesis who held the funds.
However, Bitvavo insisted that any inaccessible funds are the responsibility of DGC and said it would expect the company to restore them.
“We are in discussions with multiple entities of the group and given the mingling within the group we hold DCG responsible for the outstanding amount”, a Bitvavo spokesperson said, according to Reuters.
FTX’s collapse has unlocked a cascade of unfortunate events in the crypto industry. Brokerage Genesis is now on the hook for $900m.
Meanwhile, the company’s disgraced chief executive, Sam Bankman-Fried was arrested in the Bahamas and is now set to answer for the suspicious practices that led to the collapse of the exchange and impacted the entire sector negatively.
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