Cryptocurrency: Problems at Celsius Network – Nuri boss defends business model with Bitcoin income accounts

Nuri boss Kristina Walcker-Mayer

They are working “with all their might” to ensure that payments via Celsius are possible again in a timely manner.

(Photo: Nuri)

Frankfurt Some Nuri customers are currently worried about their money: The US partner company Celsius Network paused withdrawals and transfers between accounts last week because of the “extreme market conditions”. This measure also affects Nuri’s bitcoin earnings account.

However, the Berliners refer primarily to the US partner. They are working “with all their might” to ensure that payments via Celsius are possible again in a timely manner, Nuri boss Kristina Walcker-Mayer told the Handelsblatt. A blog post by Nuri also notes that the account is subject to a “separate contract” with Celsius Network, in which Nuri is “not involved”.

The circumstance was a model that has paid off for Nuri for a long time: With the Bitcoin income account, the customer lends his virtual coins to the partner company Celsius Network via the Berlin Neobank. The US company, in turn, lends the cryptocurrencies, grants loans secured with cyber currencies and offers savings products for customers who invest their cryptocurrencies with the company.

Nuri promised a return of up to three percent per year on Bitcoin. The Berliners acted as intermediaries – and they also cashed in themselves. “We get paid for referring customers to Celsius Network,” Walcker-Mayer said. “The more a customer pays in, the higher this fee is.” Measured against the total investment, the fee is in the single-digit percentage range.

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But now customers can no longer access their Bitcoin. According to the US partner, Nuri temporarily deactivated the investment function. According to Walcker-Mayer, other products are not affected.

No impact on other business areas

Meanwhile, customers have to watch as their deposits shrink. Since last Monday, the Bitcoin price has fallen by around 19 percent by Thursday morning. The Berlin neobank explains that only “a small proportion” of its customers are affected. Nevertheless, the sums involved are considerable: According to financial circles, around 40 million euros are said to have been in the Bitcoin income accounts in June of last year.

Office of Nuri

The pause in Celsius payouts also affects Nuri’s Bitcoin earnings account.

(Photo: Nuri)

Nuri has been offering the income accounts since 2020. “Nuri’s first step was for our customers to be able to buy Bitcoin themselves,” said Walcker-Mayer. Based on their feedback, the Berlin neobank would have created the Bitcoin earnings account in 2020. “Customers wanted an alternative source of income,” she said. “The bitcoin income account allowed them to put their bitcoin to work for them.”

But now she has to deal with the problems at the partner company. Meanwhile, Walcker-Mayer made a new promise to its customers: The Berliners would ensure that “such delays in the payments of our customers (including third-party providers) will not occur again in the future”.

The problems with the Bitcoin earnings account do not seem to have an impact on other business areas of the Berliner. According to Nuri, June 13 saw its highest crypto trading volume in over a year and the fourth-strongest day in company history. “In addition, we continue to observe net inflows on the Nuri platform and only very small outflows via the crypto wallets,” said the CEO.

On her website, however, Nuri still advertises the benefits of the Bitcoin earnings account, such as “weekly payouts”. However, Nuri has meanwhile deleted another promise from the website. Before the announcement from Celsius Network, it said in connection with the Bitcoin earnings account and the partnership with Celsius Network: “The cryptocurrencies are never frozen and can be paid out at any time.” Now the passage can no longer be found.

More: No more access to Bitcoin: Nuri customers affected by problems at crypto firm Celsius

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