German crypto banks with 500K users files for bankruptcy

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The cryptocurrency market crashed in 2022. The crash saw some of the strongest crypto players go out of this business. A German startup cryptocurrency bank named Nuri having 500k customers filed for bankruptcy. It took place on 9th August in a Berlin court. It was weeks after the bank said it will be laying off 20 % of its workforce in one drive for reaching profitability. In one statement it insisted on a few things.

It was that such a move will never impact any of its services, funds, and investments with them. It cited primary cryptocurrency sell-offs and Celsius insolvency. Also other cryptocurrency funds earlier in 2022 as a reason for such a move. They mentioned the move will be ensuring the safest space forward for every customer. Yet it too stressed that the bankruptcy will never impact its services. Also no investment and customer funds. The ability for customers to withdraw any asset from the platform will too be safe. Are you new to Crypto trading and investments? Then you must check the Bitcoin trading Software.

Partnership with Solarisbank AG

Few customers reported challenges to withdraw their assets via its mobile app. Yet the German crypto bank on Twitter mentioned that it was due to high traffic and usage. It again stressed that all funds are completely safe. They asked their customers to be patient as they faced some issues during withdrawal. The good thing is their partnership with Solarisbank AG. The company itself does not take care of the fiat or cryptocurrency funds of customers. It is because of a partnership with Solarisbank AG. As per the website of the Solaris Group, Nuri partnered with this bank. Also its cryptocurrency subsidiary Solaris Digital Assets. It was for outsourcing banking along with cryptocurrency custody licensing.

They made use of the crypto as well as banking infrastructure of Solarisbank. Thus Nuri could scale all operations along with services. Nuri is now undergoing the process of insolvency and restructuring. But Solarisbank AG is not going through liquidity issues.

It allowed Nuri in scaling its operations as well as services. It was by using the banking of Solaris and crypto asset infrastructure or licensing. Solaris did not face any liquidity issues. Thus Nuri is capable of carrying on its services even when it goes through restructuring.

They mentioned that all funds in every customer’s Nuri accounts are safe because of their partnership with Solarisbank AG. This temporary insolvency proceeding will never impact their deposits, crypto funds, or Nuri Pot Investments that any customer did with them. They have assured access and will be capable of depositing and withdrawing every fund freely whenever they want. For now, nothing will be changing and all apps, products, and services of Nuri will keep on running.

Nuri also stated that it has been facing one lasting strain on its business liquidity this year because of major macroeconomic headwinds and the cooling down of private and public capital markets like the COVID-19 pandemic and Ukraine’s Russian invasion. Also, many negative developments in the cryptocurrency markets previously in 2022 such as significant crypto sell-offs, the implosion of the Terra/Luna protocol, Celsius insolvency, and other primary crypto funds led to a cryptocurrency bear market.

Bitwala was the former name of Berlin-based Nuri. It was founded back in 2015. It offers cryptocurrency savings accounts along with portfolio investment baskets dubbed Nuri Pots as well as cryptocurrency trading services on which it charges trading fees of 1 percent. They said that they are confident that the temporary insolvency proceeding will offer the best basis to develop a viable long-duration restructuring concept in the current situation of the company. Nuri joined many cryptocurrency firms that ran into liquidity issues during this year’s bear market with the most noteworthy names being Three Arrows Capital, Celsius, and Voyager Digital.

Conclusion

The company mentioned that such insolvency filings are temporary. They are now looking for some restructuring concepts. It must be viable and long-term in the current situation of the company. They are the latest crypto exchange to have changed by the bear market. Currently Singapore-based Zipmex, a Jump Cryptocurrency-backed exchange suspended withdrawals. It was because they faced challenges with liquidity.

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