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 advises EU cardholders to spend or transfer funds from their cards immediately. Funds held in app accounts are safe, Cryptopay told Cointelegraph.
Cryptopay had been using UAB PayrNet, an EMI licensed in Lithuania, to provide debit card services to its EU customers. But the PayrNet license was revoked by the central bank of Lithuania, creating the risk of users' funds being temporarily blocked on their cards.
An email indicated that only funds transferred to a user's debit card would be affected. Otherwise, "this issue in no way impacts your Cryptopay account, which will continue to function as usual."
As for funds that have already been transferred to a card, Cryptopay recommends that they be spent or transferred "as soon as possible." This can be done by using the card to buy cryptocurrency, withdrawing it like cash from an ATM, transferring it to a different card, or simply spending the money in a store.
Cryptopay also clarified that even if a customer's card stops working, the user can still recover the funds on the card directly from UAB PayrNet. Cryptopay offered to help coordinate this process if needed.
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In an email conversation with Cointelegraph, a Cryptopay representative clarified that the issue primarily affects users in the EU. However, UK users may be temporarily affected because the company has "turned off card services to maintain operational stability." These services should be up and running again within "a couple of days" in the UK.
Cryptopay's head of support, Konstantin Gorin, stated that the company has dealt with banking system crises in the past and believes that the company is ready to face this current challenge:
โThis October marks ten years in the market for us, we have seen worse things. We have already been through similar situations in the past (in 2018 when MasterCard and VISA pulled the plug on almost all existing crypto card programs and in 2020 when the Wirecard scandal hit the market), we are confident that we will get through this and on.
Gorin also stated that the team is already working on a new debit program, stating: "First order of business to make sure our affected customers are taken care of, then we are already working on a new card program solution for them and for us."
Wirecard debit card issuer went bankrupt in June 2020. At that time, it had become one of the most widely used debit card providers by crypto companies, including Cryptopay. Cryptopay later relaunched its program with a different provider.
Despite the ongoing problems in the crypto debit card industry, there are also signs that debit card companies are becoming more crypto-friendly. In March, Mastercard announced that integrate stablecoins into your payment network within the Asia-Pacific region, allowing them to be accepted in the region where Mastercard is located.
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