Using the massive downturn fueled by major crypto lender Celsius (CEL) ongoing to rollover numerous crypto companies worldwide, German crypto bank Nuri has announced that it is bitcoin (BTC) interest accounts may take a hit because of their reliance upon Celsius.
Nuri stated inside a statement on Monday that, “to [their] regret”, Celsius announced they have made the decision to temporarily pause all withdrawals and transfers between accounts because of the current extreme market conditions, adding that “this decision can also be affecting our Bitcoin Interest Account.”
They continued to state that, per Celsius, this decision is made to stabilize liquidity and processes “for the advantage of the whole community,” and that,
“[W]hile the withdrawal function has been stopped, interest will, however, still accrue throughout the pause.”
The financial institution states that, in relation to its Nuri Bitcoin Interest Account, this decision means interest rates are still accrued and will also be compensated out when these measures are scrapped, adding:
“Until you will find further updates, we’ve also made the decision to temporarily pause the investing functionality for the Bitcoin Interest Account.”
Placed in 2015, the financial institution has greater than 400,000 customers, based on data from the website. Nuri states that it is partner, Germany’s Solarisbank, hosts the financial institution accounts, and safeguards deposits as high as EUR 100,000 (USD 104,360).
Philipp Beer, Chief Growth Officer at Nuri, told Cryptonews.com that Celsius’s effect on the financial institution is restricted to Nuri’s Bitcoin Interest Account offered through its Nuri-Application.
“The Nuri-Application includes a pure brokerage function for connecting the client with Celsius. Nuri does this underneath the license umbrella of Solarisbank is the ‘Anlagevermittler’ within the relationship between Celsius and also the customer,” he stated, talking about the German term meaning a good investment broker serving as a middleman.
“All other Nuri services and products, like the banking account, Bank Card, Bitcoin and Ether buying and selling and customers’ crypto wallets (custodial and non-custodial), aren’t affected,” based on Beer.
Requested by what happens to those accounts opened up through the bank’s customers when the measures enforced by Celsius aren’t eventually lifted, Nuri’s CGO stated that, according “to Celsius, this can be a temporary withdrawal pause that’ll be lifted with time. We’re in touch with Celsius to obtain more more information around the unique circumstances and also the time period of the withdrawal pause.”
“As soon once we receive more information, we’ll share it immediately with this affected customers,” Beer stated.
The most recent development may come as crypto-focused financial industry players from around the globe intensify efforts to reassure their customers their digital assets are secure.
Canada’s major investment management firm Caisse de Depot et Placement du Quebec (CDPQ) told Cryptonews.com that, in “an atmosphere of generalized market declines (stock markets and bonds—for the very first time in half a century), investors are reducing their risk in most asset classes. Within this context, Celsius continues to be influenced by very hard markets in recent days, more particularly, the strong amount of withdrawals by customers.”
CDPQ added that,
“Celsius takes positive action to uphold its obligations to the customers (Celsius community) and it has honoured its obligation to the people to date. We is carefully monitoring the problem.”
Meanwhile, crypto exchange Gemini told Cryptonews.com that recent news from Celsius doesn’t change up the operations of their stablecoin, Gemini USD (GUSD), proclaiming that:
“Each GUSD matches an american dollar held by Gemini in US FDIC [Federal Deposit Insurance Corporation]-insured accounts or money market funds. Customers can redeem a GUSD for [USD] 1 at Gemini”
At 10:13 UTC on Tuesday, CEL expires 73.4% per day and lower 52.1% per week, presently buying and selling at USD .332.
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Find out more:
– 100º Celsius: Industry Debating Possible Impact, Lenders Reassuring Users, Nexo Offers Help
– Desperate Celsius Users Face Liquidations as Crypto Market Tanks, Solvency Debate Begins
– Bitcoin, Ethereum & Crypto Dive as Celsius Adds Fuel towards the Given Fire Now
– Texas versus. Celsius
– Binance Shares What Caused Backlog on Bitcoin Network, Resumes BTC Withdrawals
– After Terra’s Collapse, Cryptoverse Reflects on ‘Ponzi-like Assets’, Role of VCs, and ‘Ignorant’ Crypto People
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(Updated at 11:28 UTC with comments from Philipp Beer.)
