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Nuri, a crypto-focused digital banking platform, announced it has filed for insolvency in a Berlin court on Tuesday, saying the move was “necessary to ensure the safest path forward for all our customers.”
Despite the insolvency proceedings, Nuri said that customers would still have “guaranteed access” to their euro accounts and crypto wallets.
“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,” the company said in a statement.
Formerly known as Bitwala, the company has been operating since 2015, offering users the convenience of a regular bank account combined with Bitcoin and Ethereum wallets.
The startup also offers saving plans via recurring Bitcoin purchases, as well as the recently launched Nuri Pots, a collection of different exchange-traded funds (ETFs) and other investment products.
Last year, Nuri expanded its Series B funding round to 24 million euros ($24.6 million). Back then, the startup reported it had more than 250,000 customers in 32 countries.
Explaining the reasons behind the decision to file for insolvency, Nuri said that the startup has been facing a “lasting strain” on its business liquidity in 2022 due to “significant macroeconomic headwinds,” such as the COVID-19 pandemic and the Russian invasion of Ukraine, as well as “the cooling down of public and private capital markets.”
“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,” the company said.
Notably, the insolvency filing came just two months after Kristina Walcker-Mayer, the CEO of Nuri, announced the company was letting go of 20% of its workforce “to shift our strategic plans towards earlier profitability to adapt to the new reality in the financial markets.”
On a FAQ page related to the insolvency filing, Nuri said will work out the next steps together with the insolvency administrator, stressing that “all funds are safe.”
According to the company, assets in crypto wallets and vaults remain available and can be withdrawn or traded at any time, noting that it “does not have access to the coins and/or the private keys in users’ vaults.”
Nuri also stressed the custodial wallets are operated by Solaris Digital Assets GmbH (SDA), meaning that it doesn’t handle customers’ fiat and crypto funds.
Nuri’s mobile application remains available too and is maintained “as usual," allowing users to access their bank accounts via the app. Nothing has changed so far to bank transfers within the SEPA zone either, and customers can continue using their Nuri debit cards, said the company on its FAQ page.
Nuri users, however, are still unable to withdraw funds from their Bitcoin interest accounts as those were launched in partnership with the now-bankrupt crypto lending platform Celsius.
“The Celsius withdrawal freeze remains unchanged, and the withdrawal function remains inactive,” said Nuri.
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