German Crypto Bank Nuri Files Insolvency, Says ‘All Funds Are Safe’

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 way forward for all our customers.”

Despite the insolvency proceedings, Nuri said customers would still have “guaranteed access” to their euro accounts and crypto wallets.

“All funds in your Nuri accounts are safe due to our cooperation with Solarisbank AG. The temporary insolvency proceedings do not affect your deposits, cryptocurrency funds and Nuri Pot investments that have been made 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 savings plans via recurring Bitcoin purchases, as well as the recently launched Nuri Pots, a collection of various exchange-traded funds (ETFs) and other investment products.

Last year, Nuri expanded its Series B funding round to 24 million euros ($24.6 million). At the time, the startup reported that it had more than 250,000 customers in 32 countries.

Explaining the reasons behind the decision to file for insolvency, Nuri said the startup has faced a “permanent 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 of public and private capital markets”.

“Additionally, various negative developments in the crypto markets earlier this year, including large 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 notice came just two months after Kristina Walcker-Mayer, CEO of Nuri, announced that the company was letting go of 20% of its workforce “to shift our strategic plans towards previous profitability to adapt to the new reality of the financial markets. “

Nuri reports “all funds are safe”

On an FAQ page related to the insolvency file, Nuri said it will work out the next steps with the insolvency administrator, stressing that “all funds are safe.”

According to the company, assets in crypto wallets and vaults remain accessible and can be withdrawn or traded at any time, noting that it “does not have access to the coins and/or private keys in users’ vaults.”

Nuri also emphasized that the custodial wallets are operated by Solaris Digital Assets GmbH (SDA), which means it does not handle customers’ fiat and crypto funds.

Nuri’s mobile application also remains available and maintained “as usual”, allowing users to access their bank accounts through the app. Nothing has changed so far for bank transfers within the SEPA zone either, and customers can continue to use their Nuri debit cards, the company said on its FAQ page.

However, Nuri users are still unable to withdraw money from their Bitcoin Interest Accounts, as they were launched in partnership with now-bankrupt crypto-lending platform Celsius.

“The freezing of Celsius withdrawals remains unchanged, and the withdrawal function remains inactive,” Nuri said.