Nuri crypto (formerly Bitwala) had big goals in the past. The crypto bank, where it was possible to buy cryptocurrencies directly via the bank account, must now officially close after the bankruptcy in August 2022. This was announced by Nuri Managing Director Kristina Walcker-Mayer. Why is Nuri crypto officially bankrupt? What happened to Nuri crypto?
What is Nuri Crypto?
Nuri, formerly known as Bitwala, is a crypto bank founded in 2015 and based in the German capital of Berlin. The fintech startup wanted to offer an alternative to established money transfer services such as Western Union, Moneygram, etc. The neobank focused mainly on trading in cryptocurrencies.
With Nuri, it was possible to buy and trade cryptocurrencies directly from your bank account. It was the first German bank account that enabled trading with Bitcoin and Co. SolarisBank, which provides bank accounts for several fintech in German-speaking countries, is behind Nuri’s bank account.
The renaming from Bitwala to Nuri took place in 2021. Most recently, the company had over 200 employees and was very popular among crypto investors, especially in German-speaking countries. However, Nuri offered its services throughout the European Union.
What happened to Nuri Crypto?
On August 9, 2022, the Nuri company filed for bankruptcy. Nuri explained that the difficult situation in the financial markets as a result of the corona pandemic in connection with the losses on the crypto market had caused the company to find itself in a difficult financial situation. The filing of bankruptcy was necessary to ensure the further distribution of the app and the fulfillment of liabilities.
The decisive trigger for the insolvency was the bankruptcy of the crypto lending provider Celsius. Nuri’s customers were able to use the Celsius service via the app. In this article, we reported on the bankruptcy on the day of the announcement.
What were the consequences of the bankruptcy?
In his statement, Nuri announced at the time that the deposits of its users were safe. Thanks to the cooperation with solarisBank, these are also protected by law. Because Solarisbank AG is part of the Deposit Protection Fund, which legally protects deposits of up to EUR 100,000.
Nevertheless, the deposits of numerous investors were frozen at Nuri after Celsius’ bankruptcy. Nuri acted as an intermediary for customers who participated in Celsius’ earning program. When Celsius went bankrupt, Nuri subsequently froze numerous accounts.
You can find the most important information about the Celsius bankruptcy in this article on Cryptoticker.
What happens to Nuri now?
Filing for bankruptcy does not directly mean that a company has to close. The insolvency administration process is just beginning. One way the company could survive even longer was when outside investors acquired Nuri. However, in recent months, Nuri has not been able to agree on a takeover with potential companies.
Managing director Kristina Walcker-Mayer has now announced that Nuri will now cease operations on December 18, 2022. This means that more than 100 employees at the company have to be made redundant. In recent months, there have already been job cuts at fintech due to the weak crypto market.
The continued operation of Nuri would only have been possible if an external party had invested 10 million euros. But this investment would also have been associated with a considerable risk for the investors.
What does the closure of Nuri mean for its users?
In the weeks following the bankruptcy, many Nuri users felt a degree of uncertainty as to what might happen to their investments on the platform. But until the closure in December 2022, customers should be able to withdraw their deposits until then.
Deposits in euros are legally protected anyway up to an amount of 100,000 euros due to the cooperation with solarisBank. But the cryptocurrencies can also be withdrawn by the users until the end of the platform.
The cryptocurrencies were never owned by Nuri, but solely owned by the users. The wallets at Nuri are self-custody wallets. The bankruptcy of Nuri does not affect the customers’ deposits, but only the company itself. However, the customers who had interest on their cryptocurrencies via Celsius must assert their claims against this company.
What can Nuri customers do now?
First of all, as mentioned, customers will be able to withdraw their deposits from Nuri crypto in peace over the next few weeks. But there is also a relatively simple alternative for Nuri customers to switch.
There is an agreement with the neobank Vivid Money, which is also based in Berlin. Nuri customers can apply for a new account directly with the crypto and banking app and then transfer their assets from Nuri to the new platform.
What are the potential implications of closing the fintech company?
Bitwala and later Nuri was considered an extremely ambitious fintech company from Germany. The idea of being able to buy and trade cryptocurrencies directly from a bank account was an enthusiastic business model that was well-received and made Nuri (Bitwala) very successful in recent years. This was mainly due to the crypto bull markets in 2017 and 2021.
The failure of the project is a severe blow, not only for the company itself but also for Germany as a technology location. Every successful company in the crypto sector makes Germany more interesting for investors and helps with the acceptance of the future technology blockchain.
Furthermore, the closure probably sends a negative signal to the entire fintech sector. This is currently struggling with struggling financial markets and the bear market in cryptocurrencies. Nuri crypto is special in this matter since it made a fatal decision in the past with its cooperation with Celsius.
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