All about the bankruptcy of the German cryptobank Nuri
Nuri, a German cryptocurrency exchange platform, has requested the opening of insolvency proceedings. The crypto industry crisis continues. Here are details and context
Cryptocurrency exchange platform Nuri GmbH filed an insolvency proceeding in Berlin, where it is based this week.
THE REASONS OF NURI
Founded in 2015, the company explained that it made this decision due to the crisis in the cryptocurrency sector, the bankruptcy of its partner Celsius (it is a sort of "crypto-bank" that promised very high returns), and uncertainty. on the financial markets.
He specified that its users – around 500,000 – will continue to have access to their deposits. In April it managed assets of around 500 million euros.
LOOKING FOR FUNDING, BUT WITHOUT SUCCESS
Il Sole 24 Ore wrote that in recent days Nuri has been looking for financials to increase his capital, but without success. The company does not have a banking license, but has been working with German fintech Solarisbank since 2018.
THE CRYPTO-CURRENCY CRISIS
Despite being the first in Germany, Nuri's is not an isolated case globally. Indeed, it is the latest episode of a much wider crisis phase of cryptography-based digital currencies, whose collapse in value has caused major upheavals in the sector, including loss of turnover and substantial layoffs.
Bloomberg explained that the cryptocurrency industry is blaming the tightening of monetary policies adopted by several central banks around the world to contain inflation, which has developed a tendency to sell tokens within a wider detachment from higher-risk assets. .
THE CASES OF VOYAGER, THREE ARROWS, COINBASE AND MORE
A few weeks ago Voyager Digital issued a default notice against Three Arrows Capital – a Singapore-based cryptocurrency hedge fund; Voyager is its subsidiary – due to the inability to pay a cryptocurrency loan worth over $ 650 million.
In the same period, Three Arrows Capital also filed for bankruptcy under the US Chapter 15, which allows foreign debtors to protect American assets: the fund, thus, has become one of the most high-profile investment entities in be hit by the collapse in cryptocurrency prices.
In June Coinbase, the American company behind the cryptocurrency exchange of the same name, announced an 18 percent cut of its employees. There have also been layoffs in other companies in the sector such as Crypto.com, BlockFi, Gemini and in Nuri itself.
A NEW BUBBLE?
Several experts have been repeating for some time that the extraordinary growth experienced by the cryptocurrency sector in the last two years was not destined to last long, and have compared it to the so-called " dot-com bubble " (that is, companies in the IT sector) at the end. of the nineties. The bubble burst in the early 2000s: many overestimated dot-coms disappeared from circulation, but the more solid ones – such as eBay, Amazon and Yahoo! – survived and remain relevant to this day.
Mike Jones, an investor at Science Inc., told the New York Times that the euphoria for cryptocurrencies has also led to overvaluing so many companies "that don't have the bases," but there are also well-organized companies that will survive the crisis.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/nuri-criptovalute-insolvenza/ on Thu, 11 Aug 2022 13:50:20 +0000.