- German crypto bank Nuri has filed for insolvency, having run out of operational funds
- Nuri started as Bitwala in 2015 and was one of the first to offer a crypto debit card
- User funds are safe thanks to a partnership with a traditional German bank
German cryptocurrency bank Nuri has filed for insolvency, citing “current challenging market developments” and promising that user funds are not affected. Nuri, which started life as Bitwala in 2015, has been at pains to say that user funds are protected due to its partnership with an existing traditional bank, with the bank saying that “temporary insolvency proceedings” will offer the best option for a “viable long-term restructuring concept”.
Nuri Had Deal with Celsius
Nuri began life as Bitwala, one of the first crypto platforms to have a dedicated crypto debit card, in 2015. In 2018 Bitwala launched Europe’s first regulated blockchain banking solution, hosted by the Berlin-based Solarisbank, that enables users to manage both their Bitcoin and euro deposits in one place with the safety and convenience of a German bank account.
Bitwala changed to Nuri in 2021, a year after signing a deal with now defunct lending platform Celsius in 2020, allowing users to earn interest on their holdings. However, it seems that partnerships like this could be behind the company’s financial situation.
In a press release published yesterday, Nuri explained that “2022 has been a challenging year for the startup ecosystem globally”, citing the lasting impact of the Coronavirus pandemic, the economic and political uncertainties caused by Russia`s invasion of Ukraine and “significant macroeconomic headwinds and the cooling down of public and private capital markets” as reasons why the company was now struggling for cash.
More presciently, it also cited “various negative developments in the crypto markets earlier this year”, including the crypto market collapse, the implosion of the Terra protocol and the insolvency of Celsius and “other major crypto funds”, all of which has left it with no operating funds.
This insolvency filing could be an opportunity for another cryptocurrency company to take over Nuri’s customer base, as has been seen with the likes of FTX and Nexo already this year. If no buyer is found, the company may well simply go out of business, although thankfully user deposits are all safe – for once.