German crypto bank Nuri tells 500K users to withdraw funds ahead of shut down

German crypto bank Nuri has told its 500,000 users to withdraw funds from their accounts as the firm prepares to shut down and liquidate the business, marking it as another victim of the 2022 bear market.

Nuri first reported liquidity issues in August, after announcing that it had filed for insolvency amid the economic strains of Crypto Winter. It said at the time that business would continue as usual, as it worked on a restructuring plan and securing a buyout, however an acquisition has failed to materialize.

In an Oct. 18 blog post, Nuri CEO Kristina Mayer noted that despite the company’s best efforts, it is unable to maintain its operations moving forward.

Nuri is closing down its business operations. We ask our customers to withdraw their funds and assets as of 18.12.2022. Thank you for having been part of the Nuri community!

Here is a letter of our CEO Kristina Walcker-Mayer: https://t.co/gdOOeoOKDs

— Nuri (@NuriBanking) October 18, 2022

Unlike bankrupt crypto lender Celsius which locked user withdrawals before everything went south, Nuri is encouraging users to withdraw all of their assets before the Dec. 18 deadline.

“Customers have access and will be able to withdraw all funds until the aforementioned date. All assets in your Nuri account are safe and unaffected by Nuri’s insolvency. Trading will be possible until 30/11/2022,” the post reads.

Mayer explained that “this year, the challenges have become insuperable due to the tough economical and political environment of the past months, which kept us from raising new funds or finding an acquirer,” and added:

“On top, the insolvency of one of our main business partners worsened the situation significantly and put us over the edge. As a result, Nuri had to file for temporary insolvency in August this year.”

While Mayer didn’t specifically name its insolvent business partner, Celsius appears to be the prime candidate as it had partnered with Nuri to offer Bitcoin (BTC) interest accounts to its customers. These accounts were halted when Celsius went towards bankruptcy.

Mayer also noted that the company is still bullish on the potential of blockchain-based financial services.

“We still believe in innovative financial technology and are convinced that blockchain, cryptocurrency and decentralized finance will offer opportunities that add true value to the lives of people. Still, financial innovation should be safe, understandable and easy to use for as many people as possible,” Mayer wrote.