Berlin-based crypto exchange Nuri, formerly known as Bitwala, is filing for orderly insolvency and asking its customers to liquidate their accounts as of December. A takeover bid for the seven-year-old platform with about 250,000 customers had failed due to current market conditions.
FinTech Bitwala was founded in 2015 and offered one of the only free current accounts in Germany that could trade cryptocurrencies. The platform allowed the exchange of euros into Bitcoin or Ethereum and vice versa, and offered a VISA debit card in addition to online access to the current account. However, the chapter comes to an end with the failure of the latest reorganization plan, after the crypto exchange already underwent a reboot as "Nuri" in May.
Moving history
In January 2018, the crypto exchange suspended its services as card provider WaveCrest lost its VISA license due to compliance issues. The German startup ran into problems for the first time. The bear market negatively impacted the business model and crushed the crypto exchange's revenue. In September 2018, venture investors raised €4 million to launch a reboot. In their relaunch, the young team was supported by High-Tech-Gründerfonds (HTGF), the largest seed investor in Germany.
Surviving the bear market thanks to further financial support (€13 million Series A funding round), Bitwala expanded its services. As of May 2020, its then 80,000 customers could earn up to 4.3% interest on their Bitcoin invested through the Celsius network. The company also offered an income account that invested cryptocurrencies for passive income. Fueled by the crypto boom, the tide seemed to turn for the startup. Bitwala promptly grew to become Germany's third-largest neobank, with profitability within reach.
Bitwala's fresh start as Nuri
With 250,000 customers from 32 countries, the startup was able to expand their capital base to 24 million euros through a Series B funding round in May 2021. According to then-new CEO Kristina Walcker-Mayer, a radical relaunch as "Nuri" was intended to attract new customer groups and focus the app on long-term blockchain-based investing; dependence on Celsius thus grew enormously. Those familiar with the fate of the lending platform know how the story ends for Nuri. On August 9, 2022, Nuri had to use bankruptcy proceedings to protect their customers' balances.
Celsius could basically be described as the crypto equivalent of a bank - but without the strict insurance requirements that traditional lenders are subject to. That's why the insolvency of one of its key business partners significantly worsened the lending platform's situation and pushed the company to the brink. As a result, Nuri also had to file for provisional insolvency in August of this year. After all, a large part of the German company's customer funds had been deposited on Celsius.
Restructuring plans fail
In a blog post, CEO Kristina Walcker-Mayer cites the challenges posed by the difficult economic and political environment of recent months, in which fresh funding could not be raised to continue the startup's mission. The vision of a "world where everyone is able to create their financial future" comes to an abrupt end. Nuri had been working very closely with the insolvency administrators over the last 3 months on a recovery plan to continue the actual success story. However, despite several interested parties, no buyer could be found for the platform, which could have ensured continued operation with 10 million euros.
Trading will still be possible until 30.11.2022. Customers of the platform are asked to withdraw their funds no later than 18.12.2022 so that the company can be liquidated. All funds in the regulated Nuri account are safe and will not be touched by the insolvency. What happens to the funds in the Celsius interest account is no longer their responsibility: an unpleasant end not only for the German crypto exchange, but especially for the unsuspecting customers of the centralized platform.
