German Crypto Exchange Nuri Files For Insolvency Amid Market Downturn
- The incident will see Nuri becoming the first German cryptocurrency company to file for insolvency.
- Unlike other troubled cryptocurrency companies, Nuri said its customers will still have access to deposit and withdrawal services.
Germany’s cryptocurrency trading platform Nuri GmbH has become the latest victim of the ongoing market downturn. The company reportedly filed for insolvency before the Berlin court on Tuesday.
According to a report from Reuters, the company was compelled to file for insolvency after it failed to resist the financial stress caused by the prolonged bear market. Thus, it noted that its decision was triggered by the distressing bearish trend in the crypto market, the bankruptcy of big crypto companies especially the Celsius network, and the series of uncertainty in financial markets.
First German Crypto Company to Become Insolvent
As noted in the report, the company’s efforts to find short-term venture capitalists that could empower and help them fight the troubles induced by the market crash seem to have all fallen to no avail. Hence, the German cryptocurrency exchange is left with the option of filing for insolvency.
According to the court filing, Nuri disclosed that the sell-off in the crypto market along with the unfortunate crash of Celsius Network are core reasons behind that company’s decision to file for insolvency.
It appears that the collapse of the Celsius network has extended to Nuri considering the strong business relationship it shares with Celsius. Per the announcement, the incident will see Nuri becoming the first German cryptocurrency company to file for insolvency.
Speaking on this, Nuri said;
“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.”
Although filing for Insolvency has opened chances of running bankrupt for the company. Nonetheless, the company noted that it would not turn out like other troubled cryptocurrency companies that have halted withdrawal services for users. It unveiled its customers would still be able to access their funds.
Prior to this incident, the crypto market recorded a pile of cryptocurrency companies that have failed to maintain their efficiency after the market began to plunge significantly.
Despite being the first in Germany, Nuri is not on the top list of cryptocurrency companies that have collapsed amid the market downturn. Last month, the Singapore-based hedge fund Three Arrows Capital filed for bankruptcy after falling victim to the financial woes caused by the market crash.
This trend has continued to prevail as other renowned cryptocurrency companies especially crypto lenders like Celsius and Voyager Digital have reportedly faced similar challenges.
Worth noting, the rising number of crypto firms filing for insolvency had been predicted by FTX boss Fried Bankman.
Meanwhile, venture capitals focused on the blockchain and crypto market have extended help to some of the struggling companies. Furthermore, it has been identified as the perfect timing to make investment in the crypto market. As previously identified, crypto lending firms that were over leveraged are on the top list of the struggling companies.