“We’re doing better than ever,” said the head of the Berlin crypto bank Nuri, Kristina Walcker-Mayer, in April of this year. Almost four months later, Nuri has to file for bankruptcy. The bankruptcy is another setback for the German fintech scene. After the Berlin fintechs Penta and Kontist were sold to the French competitor Qonto and the Danish Ageras Group in the past few weeks, another Berlin fintech is now disappearing from the market. The wave of consolidation has begun.
Management alone is responsible for Nuri’s current bankruptcy. Because it was already clear in the spring: inflation, interest rate hikes and the Ukraine war are putting fintechs under pressure. After investing record sums last year, investors are much more cautious this year.
Still, Nuri launched a new product in April, with the last round of funding dating back to June of last year. In May, Walcker-Mayer then relented. 45 of the 200 employees had to go, the boss wanted to put Nuri on the road to profitability. But this change of strategy came too late.
When the US partner Celsius Network stopped withdrawing cryptocurrencies in mid-June, the situation worsened further. Nuri had referred customers to the Americans as part of a Bitcoin income account, who have been worried about their deposits ever since.
Top jobs of the day
Find the best jobs now and
be notified by email.
As is well known, the true greatness of management shows itself in a crisis – and that’s where Nuri failed. The company acted as if it had nothing to do with the issues, citing that Bitcoin yield accounts customers only have a legal relationship with Celsius. This approach is dishonest. A company cannot advertise a product on its own platform and then duck away when there are difficulties with it. Instead, Nuri should have approached their own customers and stood by their side.
Nuri’s bankruptcy is a red flag for the crypto industry
According to Nuri, only a “fraction” of their customers have used the Bitcoin earnings account. But the damage to the image and the possible legal risks that Nuri is facing as a result have probably ruined a new round of financing for the company. Nuri had stated on his website that the cryptocurrencies on the Bitcoin earnings accounts would never be frozen and could be paid out at any time. This has been proven to be wrong.
What applies to Nuri applies to many fintechs. Anyone who was unable to secure a round of financing in time should at least have an alternative up their sleeve, such as a sale or a merger. Otherwise there is a risk of bankruptcy.
Nuri’s bankruptcy is also a signal for the entire crypto industry. More and more crypto platforms are freezing customer funds and laying off employees. There is a high probability that Nuri will not be the last crypto service provider to slide into bankruptcy.
More: Balance, transfers, bitcoins – what customers need to know about Nuri’s bankruptcy