Gibralta based payment solutions company, Wavecrest, was shut down by Visa today — stranding thousands of people with Bitcoin credit cards now effectively worthless.
The card provider, WaveCrest, confirmed in an email to CNBC that it was required “to immediately close all Visa cards.”
“As a licensed E-Money Institution, WaveCrest is required to safeguard funds to cover all of its issued electronic money and we can confirm that these funds are safe and available for redemption through other channels,” the statement read.
Visa, a payment network, did not immediately respond to a request for comment.
Wavecrest provided its services to a number of crypto-card companies, including Bitwala, Cryptopay, Wirex and TenX. These companies convert people’s cryptocurrencies into cash that is loaded on to a prepaid card, allowing people to use the currency for everyday transactions.
Now these cards are invalid.
Tenx is -19% and Cryptopay -18% on the news, a rather tepid response considering the news.
Apparently, Tenx is already working on a solution and have taken to Twitter to assuage users.
Card issuer WaveCrest apparently informed BTC debit card companies they must IMMEDIATELY close *all* non-US accounts.@BitPay, @tenxwallet, @wirexapp all issued statements to users.
Haven’t seen statements from @xapo, @bitwala yet, but I believe they use the same issuer.
— Udi Wertheimer [BIP84] (@udiWertheimer) January 5, 2018
#TenX advisory: Following an urgent communication from our card issuer WaveCrest, payments on the TenX card will be unavailable. We are working on a solution and will let you know further details as soon as we have them. We apologise for the inconvenience.
— TenX (@tenxwallet) January 5, 2018
Monaco, another Bitcoin based debit card, reassured people they were not affected by the shut down.
Following reports https://t.co/1oFajMzzlm https://t.co/Rp8TIGxU4v that WaveCrest has been told by Visa to close all WaveCrest issued Visa Prepaid Cards, we can confirm that @monaco_card and the Monaco Visa Card is not affected by this in any way. @Cointelegraph @TheNextWeb
— Monaco Card (@monaco_card) January 5, 2018
People are understandably upset.
@wirexapp Just got a scary email saying debit cards have been suspended by Wavecrest. Please update on this! Any other users with same issues?
— PrimateStudio (@Juguelio) January 4, 2018
According to Wirex, the shut down by Visa was without warning, saying “all the cards were shut down in one second.” Dmitry Lazarichev, CEO of Wirex said Wavecrest was not responding to their concerns: “we asked for more information, but they haven’t provided any.”
Wirex has over 500,000 crypto currency cards around the world
In a statement by Visa, they said the reason for the shutdown had nothing to do with crypto currencies, but the fact that Wavecrest was not in compliance with regulations.
We can confirm that WaveCrest’s Visa membership is being terminated due to continued non-compliance with our operating rules. All of WaveCrest’s Visa card programmes will be closed as a result.
Visa has other approved card programmes that use fiat funds converted from cryptocurrency in a number of jurisdictions. The termination of WaveCrest’s Visa membership does not affect these other products.
Visa is committed to the security of its ecosystem and compliance with Visa’s operating rules is critical for ensuring the safety and integrity of the Visa payment system. Our issuers’ card programmes must comply with our membership regulations, as well as all applicable laws.
A representative from Bitwala isn’t buying it.
The change came very suddenly which gave us no time to properly notify our customers. Right now assuring them is our first priority. The decision also symbolises that Visa, and by proxy other traditional finance corporations, is not willing to service the growing crypto economy. This in turn motivates us to proceed further with our vision of building a crypto first bank which provides a bitcoin debit card with uninterrupted service.