On January 5 several crypto-payment service providers, among which are Tenx, Bitwala, and Bitpay, informed that their cards are no longer valid. The cards, which support bitcoin and other cryptocurrencies, have unexpectedly been disabled by Visa’s affiliate, the crypto-based card issuer in Europe WaveCrest Holdings Ltd. Visa claimed that the violation of its rules was the reason for the service excision. However, some cardholders believe that the ground for the ban was the “persecution” of cryptos.
Cryptos Under Taboo
WaveCrest, the worldwide provider of payment solutions and cards issue, which acts on behalf of Visa, has nailed cryptocurrency operations in Europe to the wall on January 4. These cards have been a bandwagon among the crypto enthusiasts within the past time, as they allowed them to pay for commodities and services with bitcoin and its ilks’ possessions. Being issued on the prepaid basis, these cards also helped their holders to avoid cashing out their crypto assets when purchasing goods.
Such providers as Bitwala, Cryptopay, Tenx, Bitpay, and Xapo were informed about the withdrawal of their crypto-based cards’ services out of the blue. Most of them have had to forget about providing services to their European clients and offer them a refund. Moreover, the Visa crackdown adversely affected the Pay token prices, particularly, the Tenx one decreased by 15% amid the news, as News.Bitcoin.com reported.
No More Crypto Card Freedom
Bitwala was one of the first providers to inform about deactivation of its cards. The company announced that since January 5 its cards are no longer available for either payments or withdrawals and this change is applicable to both virtual and physical cards.
Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are taken out of operation starting today. Our team is holding an emergency meeting to resolve the issue with the card holders best interest in mind and will make an update shortly.— Bitwala (@bitwala) 5 January 2018
However, the provider assured its clients that their funds are safe and clients are going to receive a refund. Bitwala also promised its customers to email them once their debit cards are available again.
The same day wallet Tenx made a similar announcement. It promised to work on the crackdown resolution and, finally, on January 8 surprised it clients with the news that bitcoin withdrawals are back online.
BTC withdrawals are back online on the #TenX wallet now. Thank you for your patience.— TenX (@tenxwallet) 8 January 2018
The company announced that despite the fact that payments and withdrawals with its cards are disabled, customers can still access payment history and other necessary details. Bitpay emphasized that while it’s working on the following decision, its crypto cards are still available in the US. Currently, the company is reflecting with WaveCrest on whether to make refunds to cardholders in bitcoin or via banks.
We're finalizing work with the Wave Crest team to provide deactivated cardholders with the choice of bitcoin or bank refund. Funds are safe, and are currently held by Wave Crest. Thank you for your patience!— BitPay (@BitPay) 9 January 2018
Xapo informed that its clients cannot activate their cards, use them to make purchases or withdraw funds. At the same time, all the recurring payments will be rejected. It will take a few weeks to settle pending transactions. All the clients, who ordered the card after December 1, 2017, will be able to get a refund. Such a policy has been offered by most of the providers, by the way.
Cryptopay announced that despite the crackdown, all funds stored on cards are safe and will be returned to cardholders’ accounts as soon as possible.
Unfortunately, our card issuer instructed us to cease all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on cards are safe and will be returned to your Cryptopay accounts ASAP. Sorry for all the inconvenience caused, we’re working on the solution!— Cryptopay (@cryptopay) 5 January 2018
Why Did Visa decide to Ban Some Crypto Cards?
It remains unclear why precisely Visa has decided to ban crypto-supportive cards, though it is not a secret that the company seemed unfriendly to bitcoin and its brethren since. In the statement from Visa Europe, which was received by the Daily Beast journalist Joseph Cox, it was said that the card services were withdrawn because the providers didn’t go along with Visa’s membership rules continually. Visa actually confirmed the termination of WaveCrest’s Visa membership. Therefore, all the Visa card programs of this kind will be closed.
Update: VISA says they've terminated WaveCrest's services due to non-compliance w/ VISA membership regulations. “We can confirm that WaveCrest’s Visa membership is being terminated and that all of its Visa card programmes will be closed as a result.”— Joseph Cox (@josephfcox) 5 January 2018
According to TNW, which reached out to Visa for the comment, the crackdown affects only services, using WaveCrest but not visa/cryptocurrency cards on the whole, which means that converting bitcoin into fiat currency will still be available thanks to the other card programs.
“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,” stated Visa in the answer to TNW.
Nevertheless, currently, it is unknown yet whether the stricken providers will find variable ways of resolving the issue.