Hundreds of thousands of pre-paid cryptocurrency cards issued by Gibraltar-based WaveCrest were deactivated yesterday after Visa terminated its relationship with the company.
Visa’s decision impacted several companies which relied on WaveCrest for pre-paid cards, funded with cryptocurrencies such as Bitcoin and Ethereum, that enable customers to make payments and ATM withdrawals in regular currencies such as sterling and Euro.
WaveCrest, which provides digital payment solutions to corporations and governments around the world, had issued pre-paid cards through Visa for numerous cryptocurrency businesses such as Wirex, Bitwala and BitPay, among others.
But yesterday Visa said it had terminated WaveCrest’s membership due to “continued non-compliance with our operating rules”.
“All of WaveCrest’s Visa card programmes will be closed as a result,” Visa said in a statement.
Visa declined to provide details of what rules WaveCrest had allegedly failed to comply with.
But its decision to terminate the company’s Visa membership meant cards issued by WaveCrest were rendered useless, even if the funds on each individual card remained safe with the Gibraltar-based company.
Wirex, one of the cryptocurrency companies working with WaveCrest, told the Chronicle that around 500,000 of its nearly one million customers would be hit by the latest development.
Imran Khan, Wirex Head of Communications, said he was “not surprised” by Visa’s decision, which he “fully supported”.
Mr Khan added Wirex had been researching for months to find another card issuer, but would have liked to have received advanced notice from WaveCrest about the latest development.
According to Mr Khan, Wirex is the world’s biggest provider of crypto-cards and is working closely with another card issue to ensure minimal disturbance to customers.
Crypto-card company BitPay notified customers stating WaveCrest was unable to provide them with more time to prepare.
Another company Bitwala announced it was holding an “emergency meeting” to resolve the issue.
The BitPay and Bitwala cards, like all Visa pre-paid cards issued by WaveCrest, were immediately deactivated.
Last night WaveCrest CEO Brent Almeida confirmed that Visa had terminated WaveCrest’s Visa licences and required it to close all the Visa cards it had issued.
“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,” Mr Almeida said in a statement emailed to the Chronicle.
“We have already notified our partners and cardholders of Visa’s requirement to close these accounts and our first priority is to ensure the safe and timely return of all funds,” he said in the statement.
“We deeply regret the inconvenience that this has caused to all of our customers affected by this decision.”
“WaveCrest’s business outside of its Visa membership remains unaffected and we continue to invest in delivering world-class B2B payment solutions to partners around the world.”
Despite no longer working with WaveCrest, Visa said it had other approved card programmes that used fiat funds converted from cryptocurrency in a number of jurisdictions.
“The termination of WaveCrest’s Visa membership does not affect these other products,” the company added.
“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.”