The European Union debit card provider for Cryptopay encountered a significant setback recently, as UAB PayrNet, a licensed Electronic Money Institution (EMI) in Lithuania, lost its EMI license. An email sent by the company to its customers on June 22 revealed that Lithuania’s central bank revoked UAB PayrNet’s license, causing potential disruptions for Cryptopay users.
As a response, Cryptopay urged users to spend or transfer any funds already transferred to a card immediately. Several alternatives are available for users, such as purchasing cryptocurrencies, withdrawing cash from ATMs, transferring funds to a different card, and using the money for purchases at retail stores. Although this primarily impacts cardholders in the EU, those in the United Kingdom might also face an interruption in their service. Keeping operational stability in mind, Cryptopay has decided to temporarily “switch off” card services in the UK, with the expectation to resume services within a few days.
Despite this situation, Cryptopay reassured its customers that funds held within their app accounts remain secure. The issue only affects funds transferred to users’ debit cards, according to the company. Moreover, the email clarified that customers could still reclaim their funds directly from UAB PayrNet if their debit cards become inactive, and the company would be willing to coordinate the recovery process if necessary.
Cryptopay’s previous experience with a similar crisis might give it some insight into navigating this situation. In 2021, the company faced uncertainty due to its ties with Wirecard, a prominent German fintech company at the time. Wirecard filed for bankruptcy when its auditor EY refused to sign off on the company’s accounts due to a $2 billion discrepancy in its finances. This financial crisis not only put Wirecard’s services in doubt but also affected cryptocurrency card providers like Cryptopay that relied on its subsidiary services.
While Cryptopay’s course of action aims to safeguard its users’ funds and minimize potential disruptions, the loss of its EMI license highlights the vulnerability of companies within the cryptocurrency space to regulatory changes. The situation also sheds light on the potential impact of such changes on their user base. It remains crucial for users and companies alike to be proactive and vigilant in ensuring their financial safety in this rapidly-evolving landscape.
Source: Decrypt
