• Bitvavo expects to receive 80-100% of the $300 million debt owed to them by Digital Currency Group (DCG).
• In January, DCG proposed a 70% payment to Bitvavo’s debt which was rejected by the exchange.
• The two parties have now come to an agreement and the details of it will be published in the next few days.
Bitvavo Expects to Receive Debt from DCG
Bitvavo recently released a statement announcing that they expect at least 80% of their debt owed by Digital Currency Group (DCG) will be settled sometime in the future. Reportedly, DCG owes Bitvavo around $300 million (280 million euros).
Rejection of 70% Payment Proposal
In January 2021, DCG proposed a 70% payment towards Bitvavo’s debt but this offer was rejected by the dutch crypto exchange as they believed that full payment could still be made by DCG. Since then, both parties worked on reaching an agreement with better terms.
In-Principle Agreement Reached
The recent in-principle agreement between both parties included a recovery rate of between 80-100%. According to the statement released by Bitvavo, this agreed upon amount will be paid in different forms such as cash, digital currency and convertible preferred equity notes in DCG. The announcement also mentioned that more elaboration and signing of agreements under Chapter 11 proceedings will take place over the next few weeks.
Plan Support Agreement Submitted for Approval
Once the details are worked out between both parties, they will work out a Plan Support Agreement (PSA) from this deal and submit it for approval to “Unsecured Creditor Committee” (UCC). If approved, PSA can then be presented before bankruptcy court for ratification which would open up space for execution process and repayment commencement.
Genesis Makes In-Principle Deal with Gemini Exchange
This deal comes after subsidiary company Genesis made an in-principle agreement with Gemini exchange and other creditors where either its equity should be turned over or sold to creditors due to last year’s downfall faced by many crypto networks following deaths of Celsius, Terra and BlockFi affecting their businesses severely.