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German crypto bank Nuri joins a growing list of crypto service providers to shutter their doors permanently amid the bear market.
Three Arrows Capital. Celsius. Voyager Digital. The list of crypto bankruptcies, shutdowns and trading freezes has been endless in 2022. And the year isn’t over yet. This week, German crypto bank Nuri urged its users to withdraw funds ahead of the company’s planned shutdown in December — at least Nuri’s users were given proper notice.
The crypto bear has been relentlessly cleansing the market of excess, leverage, poor risk management and outright scams. If industry prognosticators are to be taken seriously, the market could see one final capitulation before conditions begin to improve.
This week’s Crypto Biz chronicles Nuri’s shutdown, the latest drama surrounding Voyager Digital and Silvergate Capital’s difficult quarter.
German crypto bank Nuri tells 500K users to withdraw funds ahead of shutdown
After disclosing liquidity issues in August, Nuri informed its 500,000 users this week that it would cease operations on Dec. 18. That gives users two months to withdraw their funds before the company unwinds its operations due to the bear market. Nuri CEO Kristina Mayer assured users that “All assets in your Nuri account are safe and unaffected by Nuri’s insolvency.” Nuri going bust isn’t good for the industry, but they handled it much better than Celsius, which locked user withdrawals before filing for bankruptcy.
Nuri is closing down its business operations. We ask our customers to withdraw their funds and assets as of 18.12.2022. Thank you for having been part of the Nuri community!
Here is a letter of our CEO Kristina Walcker-Mayer: https://t.co/gdOOeoOKDs
— Nuri (@NuriBanking) October 18, 2022
Voyager Digital won’t sue its executives for incompetence, will claim insurance on them
The Voyager Digital saga took another surprising turn this week after the company opted not to sue its executives for incompetence for their role in facilitating the Three Arrows Capital debacle (and Voyager’s in the process). For those not up-to-date on the drama: Voyager issued a $675 million loan to Three Arrows Capital without proper due diligence. That loan was never paid back and became a key element in Voyager’s bankruptcy. So, why aren’t the executives being sued? According to reports, they received immunity from the lawsuit when Voyager’s assets were acquired by FTX US via auction in late September.
Y’all. Voyager Digital filed an amended disclosure statement today in its chapter 11 bankruptcy case and its disclosure about 3AC is F*CKING bonkers. pic.twitter.com/zxYFmouerS
— PETITION (@petition) October 18, 2022
Silvergate Capital’s crypto-to-fiat transfers decrease by $50B compared with Q3 2021
Few stats convey just how brutal crypto winter has been than Silvergate Capital’s crypto-to-fiat transfers. The company disclosed this week that transfers on its network plunged by $50 billion year-over-year in Q3, which is an alarming sign for those banking on crypto mass adoption among financial institutions. But, there was a silver lining: Silvergate’s profits rose 84% year-over-year to $43.328 million. Investors responded to the news by dumping Silvergate shares, which plunged 20% on Oct. 18.
Binance launches $500M lending project to support crypto miners
Crypto exchange Binance is launching a new $500 million lending project to finance cash-strapped Bitcoin (BTC) miners during the bear market. The new Binance Pool will give miners access to loans over an 18-to-24-month term, where they will pay 5% to 10% in interest and put up physical or digital assets as security. Only “blue-chip” miners can qualify for the loan. “One of the requirements is that the applicant must be classified as a Binance VIP user and connect at least 500 PH/s to the Binance Pool for a minimum of 24 months after the loan is issued,” a Binance spokesperson told Cointelegraph.
Before you go: When will the crypto bear market end?
Are you sick and tired of the crypto bear market? How much longer until the market turns? While nobody has a crystal ball, I remain steadfast in my belief that Bitcoin will likely see a cyclical bottom in the next few months, followed by a prolonged accumulation phase. In this week’s Market Report, I sat down with fellow analysts Marcel Pechman and Benton Yaun to discuss crypto’s short-term outlook. You can watch the full replay below.
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