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The European Union debit card provider for Cryptopay has lost its Electronic Money Institution (EMI) license, according to an email sent by the company to its customers on June 22.
Cryptopay was using UAB PayrNet, a licensed EMI in Lithuania, whose license was revoked by Lithuania’s central bank.
The company disclosed the situation and recommended users spend or transfer any funds that have already been transferred to a card immediately. Several options are available for users, including purchasing cryptocurrencies, withdrawing cash from ATMs, transferring funds to a different card, or utilizing the money for purchases at retail stores.
While the disruption primarily affects EU cardholders, those in the United Kingdom could also experience an interruption to their service. Cryptopay has taken the decision to "switch off" card services in the UK as a measure to maintain operational stability.
UK-based services are expected to be back up and running within "a couple of days".
Cryptopay assured customers that funds held within their Cryptopay app accounts remain safe. The issue affects only the funds transferred to users' debit cards, the company said.
In the email, the company also explained that even if a debit card becomes inactive, customers could still reclaim their funds directly from UAB PayrNet, with the company offering to coordinate the recovery process if necessary.
Decrypt has approached Cryptopay for comment and will update this story should they reply.
Cryptopay has past experience with a similar crisis involving Wirecard, a then-prominent German fintech company. In 2021, Wirecard filed for bankruptcy after its auditor EY refused to sign off on the company's accounts, exposing a $2 billion discrepancy in its finances.
This financial crisis put many of its subsidiary services, including those used by cryptocurrency card providers like Cryptopay, in doubt.