Nuri, a German startup crypto bank with 500,000 customers, filed for insolvency on Tuesday, citing major crypto sell-offs, insolvency of Celsius and other crypto funds earlier this year as a reason for the move.
The crypto bank said the move will “ensure the safest path forward” for all 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 insolvency on Tuesday, August 9th, 2022. This does not affect our services, customer funds or investments. You can find a complete statement of this situation on the Nuri Blog: https://t.co/UgAyckWE7J— Nuri (@NuriBanking) August 9, 2022
Some customers have reported difficulties withdrawing their assets through Nuri’s mobile app; however, Nuri on Twitter said this has been the result of high traffic and usage and again stressed that “funds are safe.”
Notably, the firm itself doesn’t actually handle customers’ fiat and crypto funds due to a partnership with Solarisbank AG. According to the Solaris Group website, Nuri partnered with the bank and its crypto subsidiary Solaris Digital Assets to outsource banking and crypto custody licensing.
This enabled Nuri to scale its operations and services by utilizing Solaris’ banking and crypto asset infrastructure/licensing. With Solaris not facing any liquidity issues, Nuri is essentially able to carry on its services while the company undergoes restructuring, unlike other firms that have run into the same issues:
“Let us reiterate the most important information for you: All funds in your Nuri accounts are safe due to our partnership with Solarisbank AG. The temporary insolvency proceedings do not affect your deposits, cryptocurrency funds and Nuri Pot investments which have been done with us.”
“You have guaranteed access and will be able to deposit and withdraw all funds freely at any time. For the time being, nothing will change and Nuri’s app, product, and services will continue to run,” Nuri added.
Nuri stated that it has been facing a “lasting strain” on its business liquidity in 2022 due to “significant macroeconomic headwinds and the cooling down of 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 major 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.
Berlin-based Nuri, formerly named Bitwala, was founded in 2015 and offers crypto savings accounts, portfolio investment baskets dubbed Nuri Pots and crypto trading services on which it charges 1% trading fees.
“We are confident that the temporary insolvency proceedings offer the best basis for developing a viable long-term restructuring concept in the company’s current situation,” it added.