German crypto exchange platform Nuri hit by crypto winter, applies for insolvency

Due to the extended bear market that the cryptocurrency industry has been experiencing since the year’s beginning, the German crypto exchange platform Nuri recently filed for insolvency before the Berlin court on Wednesday.

As per a recent report by Reuters, despite the fact that insolvency frequently ends in bankruptcy, users of Nuri will still be able to transfer their funds, unlike other platforms and investment funds that have stopped allowing user withdrawals.

Nuri is apparently the first German crypto company to declare bankruptcy after being unable to locate any short-term venture capitalists ready to support them in recovering from the impacts of the notorious “crypto winter.”

Nuri followed other troubled crypto companies

Nuri states that the primary causes for the company’s filing for insolvency were the failure of the crypto lending platform Celsius Network and the collapse of the cryptocurrency market. Notably, the German exchange had strong businesses with Celsius. It stated:

“This challenging environment has had a lasting impact on the business development of Nuri GmbH and has now led the management to file for insolvency at the Berlin District Court.”

Because of its collaboration with Solarisbank, a German-licensed technology company, Nuri was able to operate without a banking license, which may signal the start of more stringent regulations for crypto businesses with headquarters in Germany.

Large crypto companies have been suffering from the effects of the “crypto winter” for a few months now, with several significant companies cutting staff or even shutting altogether. The first and most well-known was cryptocurrency hedge firm Three Arrows Capital (3AC), which declared bankruptcy after the collapse of Terra and its stablecoin UST, which wiped out roughly half a billion dollars from the market. As a result of the incidents, the crypto lending platform Celsius Network, which had a $1.19 billion shortfall on its balance sheet despite reaching a valuation of over $3 billion, filed for bankruptcy.

Businesses like Voyager Digital, BlockFi, Zipmex, and now Nuri later joined the force, despite being in full force in the preceding months.