San Francisco-based crypto payments firm, Wyre, has recently announced its decision to shut down after nearly a decade in business. The company cites the challenging conditions of the crypto bear market as the primary reason for winding down its operations.
This move has sent shockwaves through the industry, highlighting the impact of market volatility on crypto-related businesses.
Quick facts:
- Wyre is shutting down due to the challenging conditions of the crypto bear market.
- Wyre restricted client withdrawals in January, citing the need to navigate the tough market environment. Layoffs and rumors of a potential shutdown followed.
- Market conditions have also led to the closure of other crypto firms, such as Genesis, Three Arrows, FTX.
In a blog post on June 16, Wyre expressed the difficulty of the decision, emphasizing that it was made to safeguard the best interests of its key stakeholders and customers. The company assured users that their assets would remain secure during the process.
Wyre provided a specific timeline for customers to withdraw their assets from the platform. Users were given the opportunity to initiate withdrawals via Wyre’s dashboard until Friday, July 14th. After this date, the company will implement a separate process to recover any remaining assets on the platform.
While many might assume that regulatory pressures in the United States contributed to Wyre’s shutdown, the company explicitly stated that its closure was unrelated to any hawkish “regulatory agency direction.”
Instead, Wyre pointed to the challenging conditions of the bear market, which have put significant financial strain on the firm.
Wyre’s decision to wind down operations underscores the vulnerability of businesses operating in the crypto space. The extreme volatility and unpredictability of the crypto market can pose significant challenges to companies, particularly those heavily reliant on market conditions.
This development may lead to a broader discussion about the sustainability and resilience of crypto-related ventures.
Crypto Bear Market of 2023
Troubles at Wyre, the San Francisco-based crypto payments firm, began to surface earlier this year. In January, the company made a significant decision to restrict client withdrawals, allowing them to access only 90% of the funds held in their accounts.
Wyre justified this move by stating the necessity of navigating the challenging market environment that prevailed at the time.
The company emphasized that this decision was made with the best interests of their community in mind. They also openly acknowledged that they were exploring strategic options amidst the bear market conditions.
These restrictions on withdrawals came shortly after Wyre had already laid off 75 employees, which sparked rumors about the company’s potential plans for a shutdown.
Having been in business since 2013, Wyre offered a range of services, including an instant fiat-to-crypto checkout gateway accessible to various applications through an API.
However, the recent developments and the decision to limit withdrawals raised concerns about the future prospects of the company.
Wyre is not the only crypto firm to shut down in 2023, citing market conditions. Genesis, a crypto lender, had a turbulent start to 2023 when it filed for Chapter 11 bankruptcy with a lengthy 83-page bankruptcy plan and a 15-page filing.
Genesis, a subsidiary of Digital Currency Group, had a challenging year in 2022, including a substantial loan loss with Three Arrows Capital, who themselves filed for bankruptcy in July.
