The German cryptocurrency bank Nuri declared bankruptcy on August 9th. The bank, with over 500,000 customers, cites the recent crypto sell-offs and the bankruptcy of Celsius as grounds for the move.
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The bank claims that its recent action will improve security for its customers’ money. However, it assured its customers that their monies and its services would be safe from the app’s influence.
Users can still withdraw funds regardless of the insolvency application. Hence, withdrawals are still allowed on the platform.
Many customers, however, report that they have been locked out of the bank’s mobile app and cannot access their funds. The financial institution has tweeted a response to the news story.
The financial institution speculates that this may be the result of an increase in platform usage. Meanwhile, the German business underlined that money are still safe.
Meanwhile, the bank does not deal with customers’ crypto and fiat money. This is due to the company’s cooperation with Solarisbank AG. Solaris Digital Assets, Solaris Group’s cryptocurrency division, was a partner of Nuri’s.
The cooperation conditions said that Nuri bank will be using the company for cryptocurrency custody. Using Solaris’ crypto asset and banking infrastructure, Nuri was able to expand its offerings and operations.
That means the German bank may keep providing its services to Solaris without worrying about the company’s ability to pay its bills. This will allow Nuri to reorganize the business as it recovers from its financial difficulties.
Consumers may still make withdrawals.
Other companies who have filed for insolvency, however, can’t say the same. Most insolvent crypto businesses had suspended withdrawals after going bankrupt.
Users can still make deposits and withdrawals without any restrictions. For now the company’s services, products, and app will still be functional,” the article added.
Further, Nuri reported that the organization has had liquidity concerns in 2022. This is related to the global financial crisis, the aftereffects of the Russia-Ukraine crisis, and the Covid-19 pandemic.
In addition, the company’s bottom line has taken a hit due to a slew of unfortunate events in the cryptocurrency industry. This involves the massive selling of cryptocurrencies, the bankruptcy of Celsius, and the destruction of Terra.
Meanwhile, development on Nuri began in 2015 under the name Bitwala. It’s a place to make and trade cryptocurrencies, as well as save and invest in them.
The German bank is one of many crypto firms struggling with cash flow in 2022. A few examples are the companies Celsius, Three Arrows Capital, Babel Finance, and Voyager Digital.