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Withdrawal freeze at Celsius hits German fintech Nuri

admin by admin
June 17, 2022
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Withdrawal freeze at Celsius hits German fintech Nuri
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Due to the “extreme market conditions”, the American crypto provider Celsius Network paused withdrawals and transfers to its accounts on Monday, June 13. Since the German Neobank (formerly Bitwala) is handing over Bitcoin (BTC), which are invested in the income accounts, to Celsius Network, the current Celsius liquidity crisis has a corresponding impact on German investors.

BTC and ETH trading, wallets, Nuri bank account not affected

The Berlin-based fintech Nuri lured on its website with up to three percent interest on its Bitcoin income account. The Bitcoin assets of the customers ended up at Celsius Network – and they have now stopped their withdrawals. That is why Nuri customers cannot withdraw their Bitcoin from their income accounts at the moment.

However, only Nuri’s Bitcoin earnings account is affected by the current situation at Celsius, Philipp Beer, Nuri’s Chief Growth Officer, tells Cointelegraph in German. All other products and services of Nuri, such as the bank account, Bitcoin and Ether trading as well as the crypto wallets of the customers work smoothly. Even the recently announced dismissal of 20 percent of the workforce would have no impact on Nuri’s operations, Beer said.

The Nuri app fulfills a pure mediation function to connect your customers with Celsius. Neobank does this under the license roof of Solarisbank as an “investment intermediary” between Celsius and the customer. This means that with the Bitcoin income account, the Nuri customer lends his crypto assets to Celsius Network via Berlin Fintech. For the temporary transfer, Celsius finally owes the customer interest income and must also transfer Bitcoin back if the investor wishes to do so.

No deposit protection from Nuri

But this very process has now been paused. According to Celsius, this is a temporary withdrawal suspension. The US company promises that it has taken measures to stabilize liquidity and smooth operations.

“We are in contact with Celsius to get more detailed information about the current situation and the duration of the withdrawal stop. As soon as we receive further information, we will immediately share it with the affected customers,” said Beer. However, there is no deposit protection for the cryptocurrencies invested via the Bitcoin income account. Nuri’s risk disclosure states that in the event of the failure of Celsius Network and in the event of the loss of the invested coins, Nuri will not provide any compensation to investors. On the other hand, the investors”completely bear the risk of the insolvency of Celsius Network. The sole debtor of the claims of investors to the agreed income, as well as the repayment of the amount of cryptocurrencies used, is Celsius Network“.

Crypto Winter Is Here

The current crypto market has been in a downtrend for months. According to Beer, all risk assets are affected by this, “but especially the crypto markets had to record enormous price drops”. However, Beer said the Celsius decision to pause the payouts was not the trigger, but that continued to contribute to investor uncertainty.

“On the one hand, there was a downturn of up to 80 percent after each high price, so it is likely that we have not yet seen the low point. In addition, we have fallen into a kind of “perfect storm” both macroeconomically and in the crypto world: interest rates are rising, inflation is exploding, the markets around the world are giving way. In the crypto world, with the bursting of the NFT bubble and the UST/Terra debacle in recent weeks, we have had some events that the market has to digest”.

For investors, however, Nuri’s Chief Growth Officer sees “an opportunity to invest cheaply” in the current crypto winter. However, in order to be independent of the volatility of the market, Beer recommends “creating a regularly running savings plan”.

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