The bear market takes another victim
Capital of the Three Arrows. Celsius. Digital traveler. The list of crypto bankruptcies, shutdowns and trade freezes has been endless in 2022. And the year is not over yet. This week, German crypto bank Nuri urged its users to withdraw funds ahead of the company’s scheduled shutdown in December — at least Nuri users have been duly warned.
The crypto bear has relentlessly cleaned the market of excesses, leverage, poor risk management, and outright scams. If industry predictions are to be taken seriously, the market could see one last surrender before conditions begin to improve.
This week’s Crypto Biz chronicles the shutdown of Nuri, the latest drama surrounding Voyager Digital and Silvergate Capital’s difficult quarter.
German crypto bank Nuri asks 500,000 users to withdraw funds before shutdown
After revealing liquidity problems in August, Nuri informed his 500,000 users this week that it would cease operations on December 18. This gives users two months to withdraw their funds before the company ceases 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’s bankruptcy isn’t good for the industry, but they handled it much better than Celsius, which locked user withdrawals before bankruptcy filing.
Nuri closes its business activities. We ask our customers to withdraw their funds and assets from 18.12.2022. Thank you for being part of the Nuri community!
Here is a letter from our CEO Kristina Walcker-Mayer: https://t.co/gdOOeoOKDs
— Nouri (@NuriBanking) October 18, 2022
Voyager Digital will not sue its leaders for incompetence, claim insurance on them
The Traveling Digital Saga took another surprising turn this week after the company opted not to prosecute its leaders for incompetence for their role in facilitating the debacle of Three Arrows Capital (and Voyager in the process). For those unaware of the drama: Voyager provided a $675 million loan to Capital of the Three Arrows without proper due diligence. This loan was never repaid and became a key element in Voyager’s bankruptcy. So why are the leaders not being prosecuted? According to reports, they received immunity from trial when Voyager’s assets were acquired by FTX US via auction end of September.
You all. Voyager Digital filed an amended disclosure statement today in its Chapter 11 bankruptcy filing and its disclosure on 3AC is F*CKING bonkers. pic.twitter.com/zxYFmouerS
— PETITION (@petition) October 18, 2022
Silvergate Capital crypto-to-fiat transfers down $50 billion from Q3 2021
Few statistics accurately reflect what a brutal crypto winter was that Silvergate Capital’s crypto-fiat transfers. The company revealed this week that transfers on its network plunged by $50 billion year-over-year in the third quarter, which is an alarming sign for those betting on the massive adoption of crypto by financial institutions. But there was a silver lining: Silvergate’s profits rose 84% year-over-year to $43.328 million. Investors reacted to the news by dumping shares of Silvergate, which fell 20% on October 18.
Binance launches $500 million loan project to support crypto miners
Crypto exchange Binance is launching a new $500 million loan project to fund cash-strapped Bitcoin (BTC) miners during the bear market. The new Binance Pool will give miners access to loans for 18-24 months, where they will pay 5-10% interest and pledge physical or digital assets. Only prime miners are eligible 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 at least 24 months after the loan is granted,” 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 long before the market turns? Although no one has a crystal ball, I remain convinced that Bitcoin will likely experience a cyclical bottom over the next few months, followed by an extended accumulation phase. In this week’s market report, I sat down with fellow analysts Marcel Pechman and Benton Yaun to discuss the near-term outlook for the crypto. You can watch the full replay below.
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