DCG Update Statement (07-02-2023)

BitvavoFeb 7, 2023

As previously reported, Bitvavo, along with other creditors and advisors, is actively engaged in conversations with DCG to recover the outstanding amount as soon as possible.We are pleased to announce that yesterday night (6 Feb), in a second hearing, the parties proposed a satisfactory agreement in principle which is set forth in a term sheet to be published later in the coming days. [Update: term sheet was filed February 10]

Further elaboration, signing and handling within the Chapter 11 proceedings will follow in the coming weeks. With this proposed in-principle agreement, a period of intensive negotiations comes to an end and the process enters a new phase in which details will be worked out. This new phase greatly accelerates the repayment process.

Negotiation outcome of 80-100%

A proposal on repayment of the first approx. 70% within a term acceptable to Bitvavo had been on the table since the beginning of this year (see blog). In the recent period, discussions were held about the remainder. The result submitted to the court amounts to an expected "recovery rate" of between 80-100% which will be repaid in cash, digital assets, cash and convertible preferred equity notes in DCG. Further details will be announced shortly.

Procedure and timeliness

The in-principle agreement ("Term sheet") will be published today or tomorrow. In the coming weeks, this agreement will be further developed into a "PSA" ("Plan Support Agreement"). This PSA will be submitted for approval to the "UCC" ("Unsecured Creditor Committee"), a recently constituted representative body of all creditors. Bitvavo has been selected to take part in this committee and will review the proposed plan on behalf of all creditors. If the UCC agrees, the PSA needs to be ratified by the Bankruptcy court, after which execution and thus repayment will proceed.

Although the in-principle agreement presented today has not yet been formalized and may still be subject to change, we are optimistic because the vast majority of creditors, as well as DCG and Genesis, were involved in the construction of this plan and are in general agreement on the economics.

Certainty for customers

As previously stated, the current situation regarding DCG has no impact on Bitvavo's customers, its platform and its services. Bitvavo guarantees the outstanding amount, has the financial resources to do so, and, as previously indicated, has as such assumed the risk of its customers.

Questions?

We put our customers first. These are not merely words, but are backed by our actions. Our strong, independent financial position enables us to handle the situation in this way.

We will continue to actively inform our customers about future developments. If you have any questions, please contact [email protected] or check out our FAQ.