When it rains, it often pours in the cryptocurrency industry. Nuri, a German crypto-oriented financial institution, has filed for insolvency. Like companies in other finance segments, Nuri struggled to attract capital and suffered from bearish crypto market conditions.
Nuri Has Gone Bankrupt
It is commendable to see some of the early attempts at establishing a crypto-focused digital bank. Nuri, located in Germany, took on a tremendous challenge by entering an industry that continues to struggle for mainstream attention. Even though the company noted success – previously under the Bitwala banner – it is time to cut the losses and look for new opportunities.
Earlier this week, Nuri indicated it would lay off 20% of its employees in a bold to remain solvent and turn the net loss into a profitable business again. Unfortunately, it seems that decision was a bit immature, and filing for insolvency is the only other option. However, the company claims no services, funding, or investments with Nuri are affected. More importantly, customers should be able to withdraw funds without problems.
Under the hood, Nuri uses Solarisbank for its licensing and regulatory aspects. Through that collaboration, the crypto-oriented bank can provide customers with savings and crypto investment products and services. Nuri has over half a million clients and saw its revenue increase four-fold throughout 2021. However, the current bearish crypto market conditions and macroeconomic uncertainty create an unsustainable environment.
The crypto industry has seen its fair share of recent tissues. The Terra protocol imploded, various stablecoins lost their peg, Celsius became insolvent, and other crypto funds have taken blows. All of these developments lessen investors’ risk appetites and result in less capital flowing to companies like Nuri. The team intends to restructure its business for the future, though, which is worth keeping an eye on.