Bitwala, temporarily Nuri, was a popular Bitcoin wallet with a bank connection that actually went bankrupt but is now alive again. We talked to the two bosses about what went wrong last time – and what they want to do differently this time.
Bitwala is back! The popular Bitcoin bank from Berlin, which was temporarily called Nuri and went bankrupt, is back, and Dennis Daiber and Jan Goslicki explain why.
“We want to be proactive about the fact that it is the same app from the same people instead of calling it blahblawallet,” says Dennis Daiber. Of the actual founders, only Jan Goslicki is still in the team, Jörg and Ben are gone, and Dennis Daiber, who was actually Head of Trading, is now CEO.
Bitwala was a fine product. Hardly anyone disputed that. A wallet for self-custody that was connected to a Euro bank account and a debit card, and which could also be used to invest Bitcoins with interest. At a certain point, Bitwala was called Nuri, and a little later, not long after the FTX bankruptcy, the app had somehow become insolvent.
Users didn’t notice that much about it. The wallet continued to run, the keys are stored locally anyway. Now, with the new wallet, all you have to do is log in. On the surface everything remains the same.
“The technical basis of Bitwala, i.e. the intellectual property,” explains Jan, “has remained the same.” But, adds Dennis, “everything that was unnecessary was taken out in order to limit ourselves to the essentials.”
Banking scales poorly
What became unnecessary and what is essential? This leads to the question of what Bitwala wants to become – and why the app actually failed in the end. Dennis and Jan can now talk about this a little more openly after the restart. The usual assumption was that Nuri ran into payout difficulties because of the Celsius bankruptcy. But it is wrong, assures Dennis.
“Economically, Celsius had no impact whatsoever. The Bitcoins were with Celsius, not with us, we had no liability whatsoever. But it was just reputational damage.” And that became something like the final nail in the coffin.
The core problem was, once again, the bank. Better said: the regulation of the bank. “In the end, Solaris Bank was no longer able to onboard new customers. This was determined by the regulators, it effectively meant a ban on new customers entering the bank account. We were also no longer able to offer a bank account in France due to supervision, only in the DACH region.”
However, what made Bitwala so attractive – the bank account – was already failing to scale with demand. The fees became too high in the long term. “We had been planning to set up our own bank for a long time,” says Jan, “and had everything ready, all the documents, everything that was necessary. That would have been our liberation. But we still needed 50 million euros for the initial deposit and runway. And those,” Jan shrugs, “didn’t exist in 2022.”
Sure, these were unfavorable times. Celsius, Terra, FTX, and Ukraine. Perhaps this slowdown in the market was the reason why no investor wanted to advance 50 million. Or maybe it just made it impossible to deny that no one would be found any longer. In any case, the money ran out, Nuri had to lay people off, and a little later it was over.
The focus on the wallet
So now it begins again. The technology is there, the customer base is there. But what will Bitwala do differently this time?
For one thing, the bank account is gone. It was the focus of the old app. Now the self-custody wallet is there. You can add additional services to them. This makes it much more flexible, says Dennis, and you can also onboard residents from other regions, such as South America, without a KYC procedure.
The wallet can be connected to a bank card and a virtual IBAN. This could reconcile German users who don’t have a bank account in the app. You can pay euros to a virtual IBAN. They are then on the card that is connected to the Bitwala app and you can exchange them for Bitcoins or top up the card with Bitcoins. This will soon be supplemented by an internationally valid Visa card.
In the future, Bitwala would like to introduce Lightning – there is already a concept for this – and eventually offer Taro or RGB tokens. Other stablecoins are also being considered. Otherwise, Bitwala has imposed a “No Shitcoin Policy”. There will only be Bitcoin and Ether, and no staking in the app either. There is also a connection to Web3 dApps. But first the app is being modernized. There is much to do.
Bitwala also has a token that some have already spotted on the Ethereum blockchain. Is Bitwala releasing an ICO shitcoin? Anyone who hoped that would be disappointed.
The token represents a profit participation right to a share of Bitwala GmbH, which was issued via tokenize.it. Tokenize.it is a product of Corpus.Ventures, the startup incubator from Ethereum pioneer Christoph Jentzsch. “This is a private offering in which selected investors can buy shares with USDC or Euro”