Crypto bank Nuri tells 500,000 users to withdraw funds
German cryptocurrency bank prepares to shut down after failing to find a buyer
Nuri, the German cryptocurrency bank, has instructed its 500,000 users to withdraw funds from accounts as it prepares to liquidate its business.
Nuri to shut down
The company is the latest victim of the crypto winter that set in earlier this year after a number of prominent cryptocurrenc firms collapsed including leading crypto hedge fund Three Arrows Capital and the original Terra LUNA crypto project, which has since rebranded as Terra Classic (LUNC).
In addition, crypto lenders have proved to be particularly vulnerable, with major firms such as Voyager Digital (VGX) and Celsius Network (CEL) filing for bankruptcy.
Nuri filed for insolvency in August and admitted to substantial liquidity issues as a result of the market downturn. It vowed to continue operations as usual as it worked on a restructuring plan and sought a buy-out. However, a rescue was not forthcoming.
Nuri CEO comments on collapse
In a blog post, Nuri CEO Kristina Mayer said: “Unfortunately, we have not been able to find investors to continue our mission and have asked our customers to withdraw their funds by 18 December 2022 [at] the latest, so the business can be terminated and liquidated.”
In addition to “the tough economical and political environment of the past months”, the company attributed its insolvency to “the insolvency of one of our main business partners”.
Although Mayer did not identify the business partner in her statement, the collapsed US lender Celsius Network is thought to be the most likely candidate as it had collaborated with Nuri to offer Bitcoin.
Celsius is currently under investigation by the Commodity Futures Trading Commission (CFTC), the US Securities and Exchange Commission (SEC) and the Federal Trade Commission (FTC).
While Celsius users had their accounts locked and have since been engaged in a battle to recoup their funds ahead of other creditors, Nuri will leave accounts open until December 18.
Striking a positive note, Mayer added: “We still believe in innovative financial technology and are convinced that blockchain, cryptocurrency and decentralised finance will offer opportunities that add true value to the lives of people. Financial innovation should be safe, understandable and easy to use for as many people as possible.”