Wyre introduces 90% withdrawal limit for users amid insolvency rumors

Crypto payment platform Wyre has announced that users can now only withdraw up to 90 percent of the funds in their accounts.

Even with the new limit, users are still subject to daily withdrawal limits — 5 Bitcoin and 50 Ether. Meanwhile, users can only withdraw up to $150,000 and €140,000 per day for the U.S. dollar and euro.

The news came amid rumors of the insolvency of the payment platform. On January 4, Axios published an insider report that Wyre then-CEO Yanni Giannaros had told employees to “brace themselves” because the company probably needed to “unwind the business over the next couple of weeks.”

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Following that report, MetaMask announced the removal of Wyre from its mobile aggregator. Later, Wyre came forward to users, admitting that it was affected by the uncertain situation in the crypto industry. The crypto industry has been affected by global macroeconomic instability. Prices of crypto and other digital assets have significantly fallen since reaching their peaks in 2021.

Furthermore, numerous renowned crypto companies announced bankruptcies last year, including Celsius and FTX. The FTX’s case, which is plagued with alleged misuse of customer funds, has increased investors’ skepticism toward the entire crypto industry.

Giannaros recently stepped down from his position as the CEO, replaced by Stephen Cheng, who was Wyre’s chief risk and compliance officer. Giannaros is now acting as the company’s executive chairman to guide the firm while it explores various strategic options.

The new chairman has assured that the company will only scale back its operations instead of stopping to operate altogether.

Wyre’s new withdrawal policy affects companies that use the platform as their wallets. NFT collectibles company Topps temporarily has suspended its marketplace as a precaution.

Founded in 2013, Wyre is a San Francisco-based crypto company that provides payment APIs for businesses that want to connect to the blockchain. Customers can swap fiats with various tokens on the platform. Users can also transfer crypto to other users via Wyre wallets.

Wyre’s operation in the U.S. encompasses more than 30 states. It also operates in several other countries, including the U.K., European Union countries and Canada.

Wyre acquisition deal falls through

In April 2022, Wyre entered an acquisition agreement with American shopper network Bolt. The acquisition deal was worth $1.5 billion and was expected to close by the end of last.

In September 2022, however, Wyre announced that both companies had decided to remain independent. After the deal fell through, Wyre co-founder Michael Dunworth left the CEO position, and Giannaros took it over.

Despite the canceled acquisition, both companies remained commercial partners, with Bolt introducing Wyre’s one-click feature to its customer platform.

“We’ve already begun integrating Bolt’s technology to help bring 1-click crypto to millions of users within the crypto space,” Giannaros said.

Initially, when Bolt announced the acquisition plan, CEO Maju Kuruvilla said crypto would be a significant part of Bolt’s strategy. Kuruvilla added that the $1.5 billion valuation for Wyre was equal to the benefits that the payment platform would bring.

The two companies did not disclose the exact reason for the failed acquisition. Bolt also did not comment on the penalty fee it had paid to get out of the deal.

Bolt and Wyre’s acquisition was not the only crypto deal that failed to come through in 2022. In July last year, Australian pay later platform Zip announced that it would not proceed with the plan to acquire American fintech Sezzle.

Zip reasoned that the “macroeconomic and market conditions” had forced it to cancel the acquisition. The Australian company provided an $11 million compensation to Sezzle for the failed deal.