Visa cancels Bitcoin cards after dispute with issuer

THOUSANDS of Bitcoin users have had their pre-paid cryptocurrency cards shut down in a crackdown by Visa on a card provider.

Several major pre-paid cards that allow users to make payments and ATM withdrawals using their Bitcoin and cryptocurrency funds were suspended as of Jan 5.

The likes of Bitpay, Cryptopay and Bitwala announced they had suspended their cards and were working to return funds to users. All the cards make payments using regular currencies such as pounds or euros, but allow users to fund the payments from Bitcoin or Ethereum wallets.

“Following an announcement from our card issuer on behalf of Visa Europe, Bitwala cards are taken out of operation starting today,” Bitwala said on Twitter. Many Bitcoin payment cards are operated using Visa provider Wavecrest, a Gibraltar-based company. Wavecrest reportedly emailed card holders informing them Visa had ordered it to close all pre-paid cards.

“Unfortunately, our card issuer instructed us to cease all Cryptopay pre-paid cards starting Jan 5 2018,” Cryptopay said on Twitter. “All funds stored on cards are safe.”

Wavecrest cards were also set to be used by London Block Exchange, which launched its Dragoncard in November last year, which would have allowed users to spend several different cryptocurrencies.

Bitcoin card provider Bitpay was also affected, telling customers in an email: “We are already in discussions with potential alternative issuers for the Bitpay card, which will allow us to serve customers in Europe and beyond.” Visa said the cards had been suspended after it terminated Wavecrest’s membership due to “continued non-compliance with our operating rules”, although it said other Visa cards that convert Bitcoin into normal currency would not be affected.