Fiat-to-crypto payments on-ramp Wyre will only allow customers to withdraw 90% of their account balances. The move is seen as a way to help the company use the remaining funds to finance its reorganisation efforts as it faces a liquidity crisis.
On January 7, crypto payments solutions provider Wyre made changes to its withdrawal policy. While the company allows customers to withdraw their funds, transactions will be limited to taking out no more than 90% of the balances held in each account, which are subject to current daily limits.
According to Wyre, the new ruling is applicable to all customers of its services and was undertaken with the intention of helping the company explore “strategic options” to “navigate the current market environment”. By reducing the amount that customers are able to withdraw, the crypto payments firm will be able to use the remaining funds to finance its reorganisation efforts as part of a total revamp.
Last week, media outlet Axios reported that Wyre was laying off employees as it was preparing to shut down its services. Two former staff said that CEO loannis Giannaros sent them an email during the holidays about a planned liquidation and dissolution of operations in January 2023. Troubles began in early September after online checkout firm Bolt terminated a $1.5 billion deal to purchase the company founded by Giannaros and Michael Dunworth. At the time, Wyre, which was valued over $1 billion, was one of the most prominent crypto-to-fiat payment on-ramps. The deal which was agreed to in April 2022, was considered the largest non-SPAC acquisition of a crypto firm and was supposed to be completed in stocks and cash.
One of the main reasons why the deal collapsed was due to the bear market conditions taking its toll on the crypto sector. Wyre co-founder Michael Dunworth, who cashed out his 12.5% stake in the company in anticipation of the purchase by Bolt being completed, saw his windfall from the deal disappear in an instance. Dunworth soon stepped down from his position at the Silicon Valley-based firm he founded with Giannoras in 2013.
The shut down of Wyre has impacted a lot of its customers as well as its partners. Earlier last week, Singapore-based crypto banking platform Juno, for which Wyre was the primary custodian of crypto assets, urged its customers to withdraw all funds deposited in their checking accounts with the bank. As a measure to help clients withdraw their crypto, Juno increased its daily limits five times over and guaranteed refunds on any transaction fees that were charged. The bank also auto-converted all stablecoin assets on the platform, like USDT, USDC and mUSDC, to fiat currency for customers to easily cash out from their checking accounts.
Likewise, on January 5, Ethereum-based self-custody crypto wallet MetaMask announced the removal of Wyre from its mobile aggregator. The feature allowed Wyre users to connect their accounts to MetaMask and purchase cryptocurrencies directly from decentralised exchanges (DEX).
Wyre announced that Giannaros has been replaced in his role as CEO by former Chief Risk Officer and Chief Compliance Officer Stephen Cheng on an interim basis. The co-founder will now serve as the Executive Chairman of the company. In the meantime, the crypto payments firm will restructure its finances while continuing to operate as usual.