Jakob and Fabian Scholz’s crypto start-up is reportedly insolvent. With Rubarb, the nephews of Chancellor Olaf Scholz originally wanted to make a big start in the financial world by saving ETFs using an app. Since its foundation in 2020, it had been able to collect around five million euros from financing rounds. Now, however, that’s off. The company cites a burst financing commitment as the cause of the bankruptcy. The Scholz nephews cannot hope for protective help from their prominent uncle.
Meanwhile, investors are outraged. In May, the company’s management announced that it was making a loss of 200,000 to 250,000 euros per month with cash of one million euros. “How can you drive the store to the wall in less than five months from a fundraising in February,” an anonymous investor comments on the insolvency to the Handelsblatt.
After the business idea of an ETF savings plan app did not bring significant success, the Scholz nephews switched to crypto. For this purpose, the DeFi financial service Kudona was founded. In cooperation with Fireblocks and Bankhaus Frick, they enabled customers to stake and loin cryptocurrencies. Fabian and Jakob Scholz and co-founder Kelvin Craig obtained a corresponding license in Lithuania. In order to generate the interest rate, Kudona converted the customer’s funds into stablecoins and then deposited them on DeFi platforms. As a result, returns of up to 3.8 percent were possible, according to the service’s website.
In total, Rubarb employs about 30 people. How it will continue for you now remains open. According to Handelsblatt, almost half of the team should leave. In the meantime, the subsidiary Kudona will become part of restructuring measures. However, the customer deposits of the crypto service are secure, according to Fabian Scholz.
Crypto Winter Takes Its Toll
In the current market environment, the noose is tightening around numerous crypto companies. The liquidity problems at Celisus triggered a real domino effect, at the end of which several lending services had to file for bankruptcy. In addition, the competition with companies such as Trade Republic may have been too great for Rubarb’s original idea of an ETF-supported savings plan app.