Nuri Crypto Exchange Goes Bankrupt, Blames Celsius Network Failure
German crypto exchange Nuri filed for Chapter 11 bankruptcy protection after struggling to get cash amid the 2022 crypto winter. With more than 500,000 customers, it is the biggest crypto startup in Germany. Nuri was established in 2015 by Jörg von Minckwitz, Jan Goslicki, and Benjamin P. Jonesformerly.
Formerly known as Bitwala, the company offers clients a wide range of services, including a crypto savings account, a portfolio investment basket, and various other crypto trading services on which customers only need to pay 1% transaction fees. In addition, the company has racked up funds worth 42.3 million euros ($43.1 million) over the years.
Nuri Became Another Victim in the Bankruptcy Fire
Three weeks ago, Singapore-based cryptocurrency hedge fund Three Arrows Capital and New Jersey-based Celsius Network bankruptcy started a fire. It engulfed Voyager Digital and BlockFi within a few weeks, and then Nuri became yet another victim.
The firm blames major crypto sell-offs and the collapse of the Celsius network for its recent shortcomings. The Celsius Network had to file for bankruptcy after it reached a deficit of $1.19 billion on its balance sheet.
Celsius and Nuri were close partners; it was inevitable that the collapse of the former would have negative spillover effects on the latter.
Although the downfall of Celsius was a major factor, Nuri wrote in a blog post that the “ongoing after-effects of the Corona pandemic and the economic and political uncertainties in the markets after Russia invades Ukraine” deserve their fair share of the blame for the recent downturn in market stability and activity.
Unlike Other Companies, Nuri Keeps Deposits Open as Usual Despite Bankruptcy
The company has an active partnership with Solarisbank AG, a financial technology company that operates under a German banking license. Nuri’s business model means that it doesn’t process customer deposits. Instead, they have outsourced banking and crypto custody licensing to the bank.
Solarisbank is currently not facing any similar liquidity issues, enabling Nuri accounts to continue using their services as they work on “developing a viable long-term restructuring concept in the company’s current situation.”
In a statement, the company assured customers that despite its bankruptcy, customers will be able to withdraw and deposit funds at their leisure. “The temporary insolvency proceedings do not affect your deposits, cryptocurrency funds, and Nuri Pot investments, which have been made with us. This situation does not affect your Euro deposits in the bank account, Bitcoin and Ether deposits in wallets and vaults, and the Nuri Pot investments.” added the company.