The crypto winter is still raging, with more companies falling as casualties. Wyre Payments, a crypto payment platform based in California, has become the latest victim. This is evident as the payment channel revealed restrictions on withdrawal limits for its customers.
Moreover, the firm has laid off its employees to weather the impact of the declining markets. Unfortunately, this action has become a pattern for most companies that went bankrupt after halting withdrawals on the platform.
Wyre took to its official Twitter page and informed its community about withdrawal restrictions. Though users can’t withdraw all their funds on the Wyre platform, the firm enabled them to access only 90% of their funds. However, it disclosed that withdrawals would also depend on its daily transaction limits.
In a detailed form, Wyre cut down the number of Bitcoin and Ether tokens for daily withdrawals. The firm fixed the withdrawal amounts at 5BTC and 50 ETH for users. Also, it dropped the daily limits for transactions in fiat currencies to $1.5 million and €1.4 million for USD and EURO, respectively.
There have been rumors about the shutdown of Wyre Payments before now. Two of its former staff affirmed the shutdown news. One of them disclosed that the CEO of Wyre, Giannaros sent emails to some employees during the holiday regarding a possible shutdown. The CEO stated that in January 2023, the firm has plans to liquidate and finally retire from crypto services.
Also, Michael Staib, another former employee of Wyre, wrote on LinkedIn about the loss of his job. He mentioned that the payment channel wouldn't sustain its stance on profits.
This news of Wyre’s liquidation could have spiked users into the massive withdrawal of funds from the platform. Hence, proactively, the company placed some restrictions on withdrawals to control the exit of funds and combat a sudden case of insolvency.
Further, Wyre assured its users that the actions are geared toward getting the best for the community. It mentioned that they are working on scaling through the prevailing bearish trend in the crypto markets. So, they are deploying some strategic measures to help them maintain their mission and uphold their customers' trust.
Wyre Reshuffles its Executive Staff
Besides the restrictions on withdrawals on Wyre, the company made some changes to its management structure. It removed Yanni Giannaros from his position as the CEO of the firm. He will now function as an executive chairman of the company.
Also, it appointed Stephen Cheng to be an interim CEO. Before his appointment, Cheng operated as the company's chief compliance and risk officer.
Wyre emerged in 2013, with its headquarters in San Francisco, California. It operates as a payment channel for cryptocurrency applications, crypto swaps, crypto and NFT wallet custody, blockchain connectivity, global payout infrastructure, etc.
Also, Wyre offers real-time payouts, direct-to-bank transfers, and same-day transfers. The company is prominent for its foreign exchange rate, which is highly competitive in cross-border user transactions.
Following the recent events surrounding Wyre Payments, some people and partners doubt the payment platform. For instance, MetaMask announced the removal of Wyre from its mobile aggregator. It disclosed this intention on January 6 and warned its customer to stop using Wyre.
Eluded from a Striking Deal
In April 2022, the giant e-commerce firm Bolt negotiated with Wyre for a takeover deal at $1.5 billion. According to the report, this was to be the biggest crypto acquisition in the crypto industry.
According to their negotiation, Wyre would not exist as an independent entity. Instead, it would operate as an integral part of Bolt. On its own, Bolt services would have to integrate Wyre’s blockchain technology.
The deal would have aided retailers in completing native crypto transactions for some services and goods efficiently. Also, users would have no difficulties onboarding the platforms and purchasing digital assets.
Both companies agreed to complete the deal in last year's third or final quarter. However, the plan never went through, as the parties canceled the deal in September 2022.
Bolt had to call off the deal due to the drop in fees on merchants. The e-commerce company reported a decline in its revenue for the first quarter year-over-year. Also, in May 2022, Bolt sacked about 250 staff. In June, it disclosed its continuous monthly losses and the need for it to reduce the costs of operations.
After canceling the deal, the firms decided to remain as partners. Bolt still used the Wyre payment channel to receive crypto assets in some of its services.
Wyre and other Firms Suffer in the Bearish Crypto Trend
Notably, Wyre is battling the prevailing bearish trend in the crypto markets. Most digital assets lost their value in 2022. For instance, Bitcoin lost over 50% of its all-time high of $69,000 as of Nov 2021. At the time of writing, BTC price stands $17,341.98.
Other crypt-related firms are not left out of the impact of the declining markets. Lots of adverse events triggered a massive loss of funds.
Firstly, in May 2022, the algorithmic stablecoin Terra and its native coin, LUNA, collapsed. Then came the liquidation of some companies like Three Arrows Capital, Celsius Network, and others. Finally, the last catastrophic blow for the year on the crypto industry is the implosion of the FTX crypto exchange.
NOTE: The statements in this article are the author’s personal opinions and are not the official Margex view. They are informative and not financial or investment advice.