By Christian Kirchner and Caspar Schlenk
The German neo-bank Nuri (formerly Bitwala) is involved in the collapse of cryptocurrencies involving the US company Celsius Network. According to research by Finanz-Scene and Finance Forward, Celsius is the central partner of the so-called “Bitcoin yield account”, which Nuri has been using to attract customers for about a year. Specifically, the Berlin-based fintech is overseeing its investors to generate up to 3% income annually on the Bitcoins held with the account and to pay in installments weekly. According to our research, the model works in such a way that Nuri transmits its customers’ crypto assets to Celsius Network. The Americans, in turn, lend Nuri investors’ bitcoins to other investors for interest.
On Monday morning, however, Celsius Network – according to its own statements, the company last managed approximately $ 12 billion in assets distributed among approximately 1.7 million customers – suspended all repayments to investors. This is done to protect customers, the group said. The obvious assumption is that Celsius simply can’t (anymore) adequately satisfy customer liquidation desires in a crypto market in crisis. As a result, Nuri customers with a “Bitcoin Earnings Account” now have to worry about their money. According to his own statements, fintech recently had nearly 500,000 customers. At the moment it is not yet clear how many of them use the “Bitcoin Earnings Account”.
Solarisbank is an account partner and provides the umbrella of responsibility
Berliners recently aggressively advertised the product on their website (“The time of low interest rates is finally over. Our partnership with Celsius Network gives you access to rates of return that you couldn’t get with an old bank account school”). At the same time, however, the offer also revealed enormous risks. First, there is no deposit protection. On the other hand, according to the separate risk information for the Bitcoin account, investors are being deceived “Completely the risk of default of Celsius Network. The only debtor of the investors’ claims on the agreed income and on the repayment of the amount of the cryptocurrencies invested is Celsius Network “. AND: “Whether or not the Celsius Network will be able to meet the demands of investors in the future depends entirely on the success of their businesses. In the event of insolvency (e.g. insolvency) on the part of Celsius Network, the investor will lose all of their investment and any income that has already been earned and not yet paid.
In regulatory terms, what Nuri is doing with Celsius corresponds to investment brokerage, with the crypto bank formally acting as the representative of another Berlin fintech, namely Solarisbank. Background: Thanks to its full banking license, Solaris is the true account partner and also provides the umbrella of responsibility needed for investment brokerage. Nuri customers then conclude their contractual relationship with the US group Celsius Network for the “Bitcoin Earnings Account”. Based on this, customers can then transfer their bitcoins in Celsius. Finally, Celsius owes the client a variable interest for the temporary assignment. Furthermore, the US company also has to transfer cryptocurrencies if the customer so wishes. But this process is now on hold.
Nuri CEO Kristina Walcker-Mayer says the first step is to remove the offer from the app and post a corresponding notice. More information will follow in the afternoon.
This is how the crypto neo-bank Nuri (formerly Bitwala) really is.