By Shelly Melancon (Switzerland)
On August 9th, a German-based crypto bank, Nuri, filed for insolvency. The bank, which has over 500k users, cited the recent crypto sell-offs and the bankruptcy of Celsius as reasons for the decision.
Nutrition Faces Insolvency Issues
According to the bank’s report, its latest decision will help protect its users’ funds. However, it stated that the application would not affect the funds of users and its services.
Additionally, the insolvency application will not stop users from withdrawing their assets. Hence, withdrawals are still allowed on the platform.
However, several users claim they have been unable to withdraw their assets from the bank’s mobile app. The bank has responded to the report on Twitter.
According to the bank, this might be due to increased platform traffic. Meanwhile, the German firm reiterated that funds are still safe.
Meanwhile, the financial institution does not handle the crypto and fiat funds of its users. This is due to the company’s partnership with Solarisbank AG. Nuri had partnered with the Solaris Group and its crypto arm, Solaris Digital Assets.
According to the partnership terms, Nuri bank outsourced its crypto custody to the firm. This allowed Nuri to increase its services and operations by using Solaris’ crypto asset and banking infrastructure.
Also read:As a result, the German bank can continue with its services because Solaris is not having liquidity issues. By doing so, Nuri can carry out some restructuring in the company as it solves its insolvency problem.
Withdrawals Still Available For Customers
However, this is not the case for other firms that have applied for insolvency. Most insolvent crypto firms had paused withdrawals after going bankrupt.
“Users can still withdraw and deposit funds freely on the platform. For now the company’s services, products, and app will still be functional,” the report stated.
Furthermore, Nuri said its company has been having liquidity issues in 2022. This is due to the global macroeconomic crisis, the aftereffects of the Russia-Ukraine crisis, and the Covid-19 pandemic.
In addition, several negative occurrences in the crypto sector have affected the company’s finances. This includes major crypto sell-offs, Celsius’ insolvency, and the fall of Terra.
Meanwhile, Nuri, previously known as Bitwala, was created in 2015. It offers cryptocurrency trading services, cryptocurrency savings accounts, and several portfolio investments.
The German bank has joined a host of crypto companies that are currently facing liquidity issues in 2022. Celsius, Three Arrows Capital, Babel Finance, and Voyager Digital are some of them.
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