German-based digital asset provider Nuri has given a heads-up to its customers to withdraw their assets from the platform before December 18, after which the firm will shut down all its operations.
Company chief executive officer Kristina Mayer disclosed the development in a blog post, saying that the firm ran into financial difficulties due to unsavory macroeconomic conditions that threatened its survival. The unfavorable conditions have led to Nuri filing for bankruptcy but reassured customers that their funds are 100% safe.
“Unfortunately, we have not been able to find investors to continue our mission and have asked our customers to withdraw their funds by 18/12/2022 at the latest, so the business can be terminated and liquidated,” read Mayer’s letter to customers. “We still believe in innovative financial technology and are convinced that blockchain, cryptocurrency, and decentralized finance will offer opportunities that add true value to the lives of people.”
Nuri first ran into liquidity problems in August following the spillover effects from Terra and Three Arrows Capital (3AC) collapse. The company kept faith that the liquidity crunch would only be a temporary setback and that a restructuring plan or an eventual buyout would put things back in place.
“We are confident that the temporary insolvency proceedings offer the best basis for developing a viable long-term restructuring concept in the company’s current situation,” said Nurin in a statement released in August.
However, Mayer noted that despite the valiant attempts by the company to put its house in order, it was necessary to draw the curtains on the project’s 500,000 customers. Customers can withdraw their funds entirely, unlike other troubled firms in the industry like Zipmex and Celsius that have frozen withdrawals and even obtained a moratorium from the courts to prevent litigation from creditors.
Cash flow problems nearly brought the industry to its knees
The virtual asset industry suffered one of its worst moments in 2022 after coming from a massive bull run in 2021. While analysts have pointed to macroeconomic conditions like the war in Europe and inflation, the industry shot itself in the foot with a series of implosions of leading projects.
Terra’s collapse set off a chain of catastrophic events that brought the ecosystem to its knees. After the de-pegging of TerraUSD (UST), 3AC announced its insolvency, while Celsius, Zipmex, and BlockFi froze the withdrawal of funds as they reeled internally from a financial crisis.
Other players in the sector, like Coinbase (NASDAQ: COIN) and Crypto.com, were forced to lay off a large chunk of their staff while bankruptcy lawyers had a field day in courts worldwide.
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