More than 3 months ago, the Terra (LUNA) ecosystem collapsed as their algorithmic stablecoin UST split from its stable. Then we heard about the bankruptcy of hedge fund Three Arrows Capital (3AC). Crypto lending platforms Celsius (CEL) and Voyager Finance (VGX) also crashed. Now, it has been revealed that a German crypto bank has gone bankrupt. Here are the details…
German crypto bank crashed after LUNA, CEL, 3AC
Nuri, a German crypto bank with 500,000 customers, has filed for bankruptcy. The platform cited massive crypto sales as a reason for this move. He also cited Celsius’s bankruptcy and other crypto funds as factors behind the bankruptcy. The crypto bank said the move will provide the “safeest way forward” for all of its customers. However, he also stressed that the bankruptcy will not affect their services, client funds, investments or ability of clients 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 reported having difficulty withdrawing their assets via Nuri’s mobile app. But on Twitter, Nuri said it was due to high traffic and usage. He stressed once again that “the funds are safe”. In particular, due to the Solarisbank AG partnership, the company itself does not hold the client’s fiat and crypto funds. According to the Solaris Group website, Nuri has partnered with bank and crypto subsidiary Solaris Digital Assets for banking and crypto custody licensing, outsourcing.
Funds are safe with Solarisbank partnership
This allowed Nuri to scale its operations and services using Solaris’ banking and crypto asset infrastructure/license. Since Solaris does not have any liquidity problems, Nuri is able to continue its services while the company is in the process of restructuring, unlike other companies that face the same problems. The platform used the following statements:
Let us repeat the most important information for you: Thanks to our partnership with Solarisbank AG, all the funds in your Nuri accounts are safe. Temporary bankruptcy proceedings do not affect your deposits, crypto funds and Nuri Pot investments on our platform. Your access is guaranteed and you will be able to deposit and withdraw all funds at any time for free. For now, nothing will change and Nuri’s app, product and services will continue to work.
Platform impacted by crypto bear market and macroeconomic developments
Nuri stated that he faces a “persistent pressure” in business liquidity in 2022 due to “significant macroeconomic headwinds and the cooling of public and private capital markets” such as the global pandemic and the Russian invasion of Ukraine. Nuri also talked about “large cryptocurrency sales in the cryptocurrency markets earlier this year.” He talked about reasons such as the explosion of the Luna/Terra protocol, the bankruptcy of Celsius. He said that various negative developments in other major crypto funds have led to the crypto market.
Berlin-based Nuri, formerly Bitwala, was founded in 2015 and offers crypto savings accounts, portfolio investment baskets called “Nuri Pots”. It also comes to the fore with crypto trading services where it charges 1 percent transaction fee. “We are confident that the provisional bankruptcy proceedings offer the best basis for developing a viable long-term restructuring concept in the company’s current state,” the company added. Nuri joins a number of crypto firms that are experiencing liquidity problems in the 2022 bear market. As we reported as Kriptokoin.com, the most notable names were Voyager Digital, Celsius and Three Arrows Capital.
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