WaveCrest Services Suspended
WaveCrest, a worldwide digital payment solutions provider, was ordered by Visa to immediately close all Visa prepaid cards that they had issued. This led to the suspension of many prepaid cryptocurrency cards in Europe, which include BitPay, Bitwala, CryptoPay, TenX, and Wirex. These cards allow people to use the cryptocurrency in their crypto wallets to make payments in fiat currencies such as dollars or euros.
Due to such an abrupt shut down, which became effective as of January 5th, thousands of transactions could not be completed. For the most part, customers weren’t even aware of why their cards were declined. However, news got around eventually that WaveCrest (according to Visa) had not been following Visa’s membership regulations. Visa did not specify exactly how they determined the company to be “non-compliant”.
An Educated Guess
WaveCrest, which is based in Gibraltar, will have to comply with the government’s newly created Distributed Ledger Technology (DLT) Framework. This is because the company technically does use DLT. Visa might not have been sure, or confident, if the company had already taken the necessary measures to comply with these new regulations. Due to the overlap between Visa’s membership regulations and DLT regulations imposed by the local government in Gibraltar, there might have been seem confusion. However, this is just an “educated speculation” on my part.
Cryptocurrency and the technology behind it is still relatively new. And, the level of complexity in its design poses significant challenges to regulators worldwide. We’ve barely entered into 2018 and already regulators are embroiled in conflicts with organizations and businesses working with cryptocurrency.
Not Just a Crackdown on Cryptocurrency
Visa made it clear that they weren’t specifically targeting cryptocurrency cards. WaveCrest had been ordered to suspend all its Visa-related services, not just crypto-based services. Dmitry Lazarichev, founder and CEO of the Wirex crypto-wallet, said, “All the cards were shut down in one second”. This is disconcerting because cryptocurrencies are still new to many people, and they already have apprehensions. So, when they discover that their crypto cannot be spent to buy what they want, due to some “non-compliance” issue, they get discouraged from using cryptocurrency.
Visa Says It’s Only WaveCrest
Visa attempted to alleviate some of the concerns regarding this crackdown by mentioning that there were other approved card services that enable users to convert their crypto coins into fiat money. Monaco Card, a prepaid cryptocurrency card provider, tweeted that its services were not, and would not be, suspended. Still, this does not take away the fact that a significant number of prepaid crypto card users were inconvenienced.
Best Course of Action
When the internet had just started to gain popularity, lawmakers were faced with tremendous challenges regarding how to regulate an entity that was not confined to a particular geographic location. To this day, we’re still battling issues like Net Neutrality, the eventual outcome of which could negatively affect cryptocurrency.
Despite these relatively small setbacks, which can be thought of as growing pains, the crypto-market is growing rapidly. So, the big picture continues to look bright. Therefore, the best course of action is to continue to learn about cryptocurrency and use it whenever you can. However, always keep as many payment options available to you at all times in order to maximize convenience.