The European Union debit card provider for Cryptopay has lost its Electronic Money Institution (EMI) license, according to a June 22 email sent to its customers. The company recommends to EU cardholders that they should immediately spend or transfer funds from their cards. Funds held in the app’s accounts are safe, Cryptopay told Cointelegraph.
Cryptopay had been using UAB PayrNet, a licensed EMI in Lithuania, to provide its EU customers with debit card services. But PayrNet’s license was revoked by Lithuania’s central bank, leading to the risk that users’ funds may become temporarily stuck on their cards.
An email stated that only funds transferred to a user’s debit card would be affected. Otherwise, “this issue in no way influences your Cryptopay account which shall continue business as usual.”
As for funds that have already been transferred to a card, Cryptopay recommends that they be spent or transferred away “as soon as possible.” This can be done by using the card to buy crypto, withdrawing it as cash from an ATM, transferring it to a different card or simply spending the money at a store.
Cryptopay also clarified that even if a customer’s card stops working, the user can still recover the card’s funds from UAB PayrNet directly. Cryptopay offered to help coordinate this process if this becomes necessary.
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In an email conversation with Cointelegraph, a Cryptopay representative clarified that the problem primarily affects users in the EU. However, users in the United Kingdom may be temporarily affected because the company has “switched off card services in order to maintain operational stability.” These services should be back up and running within “a couple of days” in the United Kingdom.
Cryptopay head of support Konstantin Gorin stated that the company has dealt with crises from the banking system in the past, and he believes the company is ready to tackle this present challenge:
“This October it’s ten years on the market for us, we’ve seen worse. We’ve already been through similar situations in the past (back in 2018 when MasterCard and VISA pulled a plug on almost every existing crypto card programme and back in 2020 when Wirecard scandal hit the market), we’re confident that we’ll overcome this and keep on.
Gorin also claimed that the team is already working on a new debit program, stating, “First order of business to make sure our affected clients are taken care of, next — we’re already working on a new card programme solution for them and for us.”
Debit card issuer Wirecard went bankrupt in June 2020. At the time, it had become one of the most used debit card providers for crypto companies, including Cryptopay. Cryptopay later relaunched its program with a different provider.
Despite continuing troubles in the crypto debit card industry, there are also signs that debit card companies are becoming more favorable to crypto. In March, Mastercard announced that it would integrate stablecoins into its payment network within the Asia-Pacific region, allowing them to be accepted in the region wherever Mastercard is.