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Wyre Shutdown Crypto Platform Citing Regulatory Uncertainty

By
Paul Ugbede Godwin
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0

Wyre is a platform that provides infrastructure for the new economy. It enables users and developers to interact with both traditional payment networks and blockchain-based digital assets. Wyre offers easy-to-use APIs, a user-friendly dashboard, and a concierge OTC desk. Wyre also provides compliance and security solutions, such as KYC, KYB, sanctions screening, transaction monitoring, and authorization. Wyre is a regulated Money Service Business (MSB) founded in late 2013 and has offices in San Francisco, Hong Kong, and São Paulo.

Wyre supports various fiat and crypto currencies, such as USD, EUR, GBP, AUD, BTC, ETH, WETH, and DAI. Wyre also issues non-fungible tokens (NFT) to verified users on its platform. These tokens are similar to the blue checkmark on Twitter and are a first step towards bringing compliance on-chain. Users with these tokens can compliantly trade on a growing list of decentralized exchanges.

However, due to the downsize nature of cryptocurrencies industry in terms of poor market inflow and regulatory uncertainty, Wyre have announced its liquidation notice and wish to focus on other ventures, in a community note written to investors and customers it pointed out factors which forced it out of business and hope to return to the crypto industry when there is improvement on regulations and favorable market conditions.

Wyre: The End of an Era

It is with a heavy heart that we announce the closure of Wyre, one of the pioneers of crypto payments and fiat-to-crypto on-ramps. After almost 10 years of building and innovating in the crypto space, we have decided to wind down our operations due to the unfavorable market conditions and the financial challenges we faced.

Wyre was founded in 2014 with a vision to make crypto accessible and easy to use for everyone. We started as a peer-to-peer exchange platform that enabled users to buy and sell Bitcoin using bank transfers, credit cards, and other payment methods. Over the years, we expanded our services to include API solutions for businesses, wallets, and platforms that wanted to integrate crypto payments and offer their customers a seamless and secure way to buy, sell, and store crypto assets.

We are proud of what we have achieved and the impact we have made in the crypto industry. We have processed over $5 billion in transactions, served over 15,000 customers, and partnered with some of the leading names in crypto, such as Binance.US, MetaMask, Juno, and Bolt. We have also contributed to the development and adoption of cutting-edge technologies, such as the Lightning Network and stablecoins.

However, despite our best efforts and achievements, we could not overcome the challenges posed by the prolonged bear market and the regulatory uncertainty in the U.S. The crypto sector has been hit hard by the market slump and the crackdown by the SEC on various crypto companies and projects. Many of our partners and customers have also suffered or shut down as a result of these factors.

We tried to find a way out of this situation by seeking new funding sources and exploring acquisition opportunities. In fact, we were very close to being acquired by Bolt, a one-click checkout company, for $1.5 billion in September 2022. Unfortunately, the deal fell through at the last minute due to undisclosed reasons. Since then, we have been struggling to keep our operations running and our team intact.

We have reached a point where we can no longer sustain our business and fulfill our obligations to our stakeholders and customers. Therefore, we have made the difficult decision to shut down Wyre by the end of June 2023. This decision is not due to any regulatory agency direction or any legal issues. We are simply unable to continue operating under these circumstances.

We want to thank all of our customers, partners, investors, and employees for their support and trust over the years. You have been the driving force behind our success and innovation. We are deeply grateful for your loyalty and feedback. We also want to apologize for any inconvenience or disappointment this announcement may cause you. We hope you understand that this was not an easy decision for us.

If you have any assets on the Wyre platform, you can continue to withdraw them via Wyre’s dashboard until Friday, July 14th. After then, we will have a separate process to recover assets remaining on the platform. If you are interested in acquiring Wyre’s or its subsidiaries’ assets, please reach out to 88 Partners.

Wyre may be closing its doors, but we are not giving up on our vision and passion for crypto. We believe that crypto is the future of money and finance, and that it has the potential to transform the world for the better. We will continue to support and participate in the crypto community in any way we can. Wyre was more than just a company. It was a family, a movement, and an adventure. We are proud of what we have built and learned together. We are sad to say goodbye, but we are also excited for what lies ahead.

IMF Applauds Naira’s Floatation, Promises Technical Support to Help the Policy Succeed

By
Samuel Nwite
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0

The International Monetary Fund (IMF) has joined other voices to applaud the Nigerian government’s decision to float the naira, removing control pegs on the troubled currency.

The Fund, which has long advised Nigeria to float the naira, allowing market forces to determine forex rates, said on Friday that it is ready to provide the technical assistance needed for the success of the policy.

“The Fund greatly welcomes the authorities’ decision to introduce a unified market-reflective exchange rate regime in line with our long-standing recommendations. We stand ready to support the new administration in its implementation of FX reforms,” the IMF Representative in Nigeria, Mr. Ari Aisen, told ThisDay.

On Wednesday, the Central Bank of Nigeria announced that it has removed all segments of the FX market, collapsing different exchange rates into the Investor and Exporters (I&E) window.

Previously, the IMF had urged Nigeria to unify its exchange rates to attract foreign and portfolio direct investments. The Fund in its Article IV Consultation with Nigeria said Nigeria needs to make a range of economic policy changes, including the removing fuel subsidy.

“Directors encouraged a continued move toward a unified and market-clearing exchange rate by dismantling various exchange rate windows at the CBN. Providing clarity on exchange rate policy would help boost investor confidence, quell capital outflow pressures, and rebuild buffers,” it said.

Recognizing the recent upward adjustments in the policy rate, they urged the Central Bank of Nigeria (CBN) to remain prepared for the possibility of further rate increases if necessary. Additionally, they advised implementing supplementary measures such as fully offsetting central bank financing of fiscal deficits and gradually discontinuing credit intervention programs.

“Strengthening the CBN’s independence and establishing price stability as its primary objective is critical. Directors also urged the authorities to finalize securitization of the CBN’s existing stock of overdrafts and emphasized that the CBN’s budget financing should strictly adhere to the statutory limits,” the Fund said.

The Bola Tinubu-led administration has implemented two key recommendations of the IMF – the removal of fuel subsidy and the floatation of the naira. However, mitigating the impact of those policies remains a key issue to be addressed.

Experts have predicted that the removal of fuel subsidies will cause inflation to rise in the coming months. JPMorgan said earlier this week that the naira, which currently trades around N663 per dollar at the I&E window will likely settle around N600 per dollar in the coming months, but will cause an increase in headline inflation.

“The near tripling of fuel prices could see headline inflation jump closer to the 25 percent mark in June and remain firmly above 20% for the rest of the year,” the bank said.

The naira depreciated to more than N750 per dollar following the announcement by the CBN that the forex market has been deregulated.

Crypto Exchange Platform, Wyre, Winds Down Operation Due to Market Conditions

By
Ojukwu Emmanuel
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0

San Francisco-based crypto payments firm Wyre, is shutting down operations after nearly a decade in business due to market conditions.

The cryptocurrency infrastructure provider which is yet another victim of a broad market slump, revealed it had to take the difficult decision to protect the best interest of its key stakeholders and customers, noting that the decision was not due to any regulatory agency direction.

Wyre announcing its plan to shut down operations wrote on Twitter,

“After nearly a decade, Wyre is winding down. Due to market conditions, we made this decision to protect the best interest of our key stakeholders and customers. This decision is not due to any regulatory agency direction. Wyre continues to secure customer assets.

The Wyre team has further disclosed that its assets are now up for sale, noting that anyone interested in acquiring Wyre or its subsidiaries’ assets, should reach out to 88 Partners.

Founded in 2013 as one of the now-oldest cryptocurrency companies, Wyre had as many as 200 staffers at its peak and was down to 50 in April.

The crypto exchange came close to being acquired by e-commerce startup Bolt for a massive $1.5 billion last year. The deal was considered the largest non-SPAC acquisition of a crypto company when it was announced.

Meanwhile, Bolt opted out of the reason for unknown reasons, while stating that it will continue its partnership with Wyre, adding that remaining independent would allow it to focus on its core areas. If the deal had scaled through, it would have seen Bolt bring its one-click checkout, authentication, payments, and fraud protection services to the cryptocurrency ecosystem.

Troubles were reported to have started at Wyre, when it implemented withdrawal limits for user accounts, citing the best interest of its community. The company noted that it was limiting withdrawals to no more than 90% of the funds in each customer’s account, subject to current daily limits.

The firm added that it was committed to its mission to simplify and revolutionize the global payments ecosystem and is exploring strategic options that will let it navigate in the current market environment.

The move suggested that Wyre was preparing to wound down its operation. Though Wyre declined the allegations, where two former employees of the firm said that the company will be scaling back to plan its next steps.

Due to uncertainty around Wyre operations, the financial technology company  Juno which had Wyre as its cryptocurrency custodian partner Wyre, recommended its users to either sell or self-custody the bitcoin held on its platform.

The company made it clear on Jan. 4 that it does not store any Bitcoin on behalf of its customers and instead relies on a crypto partner to handle such transactions.

The firm issued a statement saying that they urge customers to seize management of their assets due to uncertainty with their crypto partner, Wyre.

In another sign of more potential troubles for the firm, popular crypto wallet MetaMask announced the removal of Wyre from its mobile aggregator, which allows users to buy digital assets directly through its extension.

Wyre before its shutdown was valued at $1.5 billion and was reported to have raised a total of $29.1M in funding over 9 rounds.

Electric Truck Manufacturer Nikola Downsizes Workforce by 23%

By
Ojukwu Emmanuel
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0

American manufacturer of heavy-duty commercial battery-electric vehicles, fuel-cell electric vehicles, and energy solutions, Nikola, has downsized its workforce by 23%, which is about 270 employees as it proactively cut costs and reduced expenses.

The company on Friday stated that it will lay off 150 workers who were supporting the company’s European programs. Also, it will lay off another 120 employees based at the company’s Phoenix and Coolidge, Ariz sites.

Speaking on the downsizing of part of its workforce, Nikola CEO Michael Lohscheller said,

“Nikola has initiated a more focused business plan this quarter, concentrating on North America, zero-emission truck production, and our HYLA hydrogen business. Our battery-electric truck is in the marketplace and performing well for our customers, and the hydrogen fuel cell electric truck will go into production in a matter of weeks. We are proactively managing costs and reducing expenses. We are streamlining operations, including our organizational structure to efficiently execute our objectives”.

Nikola revealed that the cuts are expected to decrease personnel-related cash spend by more than $50 million annually. As a result of the cuts, the company’s annual cash spend is expected to decrease to $400 million by 2024.

Founded in 2015, Nikola set out to make zero-emission big rigs using hydrogen fuel cell technology. On June 4, 2020, it went public on NASDAQ under the symbol NKLA.

In July 2021, a United States federal grand jury indicted Nikola founder and former CEO Trevor Miltonbut did not indict the company. The indictment charged Milton with three counts of criminal fraud for lying about nearly all aspects of the business and two counts of securities fraud.

In February 2022, the company then installed Michael Lohscheller as the new CEO. In a statement, Nikola chairman Steven Girsky said in his six months since joining the company Lohscheller has brought “an increased sense of urgency” and “accelerated decision-making.

The new CEO Is reported to have already made several notable achievements, including having a major impact in moving the Tre battery-electric vehicle (BEV) into series production and achieving development milestones for the Tre fuel cell electric vehicle, the company says.

In February 2022, the company projected deliveries of between 300 and 500 of its first battery-electric semi trucks known as the Nikola Tre to customers.

In February 2023, the pioneering manufacturer of hydrogen electric vehicles, announced that it has selected PlusDrive to be offered on Nikola Tre vehicles coming to market in 2024. PlusDrive, developed by automated truck developer Plus, is designed to enhance safety, fuel efficiency, and driver comfort. It will be available on Nikola’s battery-electric and hydrogen-electric vehicles sold in the U.S.

However, last month, the electric truck manufacturer Nikola Motor was threatened with exclusion from the US stock exchange Nasdaq, because the share price was below $1 per share for 30 consecutive days.

The company has been granted a grace period until 20 November 2023 to comply with the regulations. Nasdaq has a minimum share price rule that requires the share price to be above $1 for 10 consecutive business days.

Electric truck company Nikola has laid off 270 people in an attempt to reduce costs and focus on the North American market. Only 900 employees will remain as 150 workers were cut from its European programs and another 120 in Phoenix and Coolidge, Arizona were also impacted. The staff reduction will save the company $50 million annually, with the overall effort reducing spend by almost $400 million by 2024. The cuts come amid a challenging time for Nikola between leadership shakeups and overall cash issues currently affecting several EV startups. (LinkedIn News)

US SEC and Binance-US have Reached a ‘Settlement Deal’

By
Paul Ugbede Godwin
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0

The US Security and Exchange Commission – SEC and Binance.US have reached a settlement agreement that will end the lawsuit filed by the regulator against the crypto exchange and its founder Changpeng Zhao. The settlement, which was announced on June 16, 2023, will require Binance.US to pay a $200 million civil penalty and to implement various remedial measures to ensure compliance with the federal securities laws.

The lawsuit, which was filed on June 5, 2023, accused Binance.US and Zhao of operating unregistered securities exchanges, broker-dealers, and clearing agencies; misrepresenting trading controls and oversight on the Binance.US platform; and the unregistered offer and sale of securities, including Binance’s own crypto assets. The SEC also alleged that Zhao and Binance secretly allowed U.S. customers to trade on the Binance.com platform, which was not registered with the SEC, and that they commingled and diverted customer assets to entities owned by Zhao.

The settlement agreement will resolve all the charges brought by the SEC against Binance.US and Zhao, without admitting or denying the allegations. As part of the settlement, Binance.US will cease offering certain crypto products and services to U.S. customers, such as BNB, BUSD, crypto-lending products, and staking-as-a-service programs. Binance.US will also register as a national securities exchange, broker-dealer, and clearing agency with the SEC, and will submit to regular audits and inspections by the regulator. Binance.US will also establish an independent board of directors and a compliance committee to oversee its operations and ensure adherence to the securities laws.

Zhao, who is also known as CZ, will step down as the CEO of Binance.US and will divest his ownership stake in the company. He will also cooperate with the SEC in any ongoing or future investigations or enforcement actions related to Binance.com or other entities he controls. Zhao will also refrain from participating in any activities involving securities offerings or trading in the U.S.

Binance has struck a deal with the Securities and Exchange Commission that will allow it to continue operating in the U.S. and protect customer assets amid an ongoing lawsuit between the two over Binance’s alleged misuse of customer funds, The New York Times reports. The agreement, which needs approval from a federal judge, will only give U.S. employees access to customers’ private wallet keys and not any international officials, including founder Changpeng Zhao. The news comes a week after Binance.US told customers to withdraw their U.S. dollars after the SEC was pushing for an asset freeze. (LinkedIn News)

The SEC’s Chair Gary Gensler praised the settlement as a “significant achievement” for the protection of investors and the integrity of the crypto markets. He said that the SEC will continue to pursue enforcement actions against entities that violate the securities laws and put investors at risk. He also urged other crypto platforms to register with the SEC and comply with the regulatory framework.

Binance.US’s new CEO Brian Brooks said that the settlement marks a “new chapter” for the company and its customers. He said that Binance.US is committed to providing a safe and compliant platform for crypto trading and innovation in the U.S. He also thanked Zhao for his leadership and vision in creating Binance.US. The settlement agreement is subject to court approval.

The settlement deal is a major blow to Binance, which is the largest cryptocurrency exchange in the world by trading volume. Binance has been under intense scrutiny from regulators around the world, who have accused it of facilitating money laundering, tax evasion, and other illicit activities. Binance has also faced lawsuits from investors who claim they lost money due to Binance’s negligence or fraud.

However, the settlement deal is also not investor friendly. It leaves many questions unanswered about the legal status of Binance’s tokens and services, and the rights and remedies of its customers. For example, what will happen to the funds and assets of US customers who have accounts on Binance? Will they be able to withdraw them or transfer them to another platform?

How will they be compensated for any losses or damages caused by Binance’s actions or inactions?

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