Nuri, a German crypto-banking startup with 500,000 customers, filed for insolvency on Tuesday, citing large crypto selloffs, the insolvency of Celsius and other crypto funds earlier this year as the reason for this decision.
The crypto bank said the move will “ensure the safest path” for all of its customers, but also stressed that the insolvency will not affect its services, customer funds, investments, or the ability for customers to withdraw their assets from the platform.
Nuri filed for bankruptcy on Tuesday, August 9, 2022. This does not affect our services, client funds or investments. You can find a full statement of this situation on the Nuri blog: https://t.co/UgAyckWE7J
— Nouri (@NuriBanking) August 9, 2022
Some customers have reported difficulty withdrawing their assets through Nuri’s mobile app; however, Nuri on Twitter said this was a result of high traffic and usage and again stress that “the funds are safe”.
Notably, the company itself does not manage client fiat and crypto funds due to a partnership with Solarisbank AG. According to the Solaris Group website, Nuri has partnered with the bank and its crypto subsidiary Solaris Digital Assets to outsource banking and crypto custody licenses.
This allowed Nuri to expand its operations and services using Solaris banking and crypto asset infrastructure/licensing. Since Solaris faces no liquidity issues, Nuri is essentially able to continue its services while the company undergoes restructuring, unlike other companies that have encountered the same issues:
“Allow us to reiterate the most important information for you: all funds in your Nuri accounts are safe thanks to our partnership with Solarisbank AG. The temporary insolvency procedure does not affect your deposits, crypto funds currency and Nuri Pot investments that have been made with us.
“You have guaranteed access and will be able to deposit and withdraw all funds freely at any time. At this time, nothing will change and Nuri’s app, products and services will continue to operate,” Nuri added.
Nuri said it faced “sustained pressure” on its trading liquidity in 2022 due to “significant macroeconomic headwinds and cooling public and private capital markets” such as the COVID-19 pandemic and the Russian invasion of Ukraine.
“Additionally, various negative developments in the crypto markets earlier this year, including cryptocurrency sell-offs, the implosion of the Luna/Terra protocol, the insolvency of Celsius and other major crypto funds have led to a crypto bear market,” Nuri wrote. .
Related: Crypto lending platform Hodlnaut suspends services due to liquidity crunch
Berlin-based Nuri, formerly Bitwala, was founded in 2015 and offers crypto savings accounts, portfolio investment baskets called Nuri Pots, and crypto trading services on which it charges a $1 trading fee. %.
“We are convinced that the temporary insolvency procedure offers the best basis for developing a viable long-term restructuring concept in the company’s current situation,” he added.
Nuri joins a host of crypto firms that ran into liquidity issues during the 2022 bear market, with the most notable names being Voyager Digital, Celsius, and Three Arrows Capital.