
Bitcoin Visa debit cards are cancelled - nicota
https://www.reddit.com/r/Bitcoin/comments/7oabzl/all_bitcoin_visa_debit_cards_are_now_cancelled/?st=JC1T42EL&sh=5284687c
======
ablation
> We're being oppressed!

Oh dear. I hope that was said with tongue firmly in cheek, because anyone who
truly believes that their Bitcoin Visa card being cancelled is a form of
"oppression" needs a reality check.

~~~
thisisit
I am sure when the card was introduced these same people would have said -
See, bitcoin is so great it is now accepted by Visa and Mastercard.

Now we get this.

Sometimes it seems the thought process has evolved to - Heads I win, Tails you
lose.

~~~
logfromblammo
Huh. I didn't know Bitcoins could be flipped.

~~~
beager
They can be flipped, but it takes three hours to know if it was heads or
tails.

------
kennyasare
A few thoughts from a CEO in this space:

1\. There are very few issuing banks for crypto <> fiat debit cards.
Internationally there has been 1 WaveCrest; which as of a few months ago
decided to discontinue support.

2\. Even when a bank will sponsor a crypto <> fiat debit card into one of the
payment networks, the company offering the card will face constant pressure
from their own bankers.

3\. This happening is from my perspective just a quick look behind the curtain
of the Digital Currency infrastructure problem as it exists today. There is no
_good_ way in, or out of digital currency at the moment, and the ones that
exist are tenuous at best. The base truth is that Traditional banks are not
capable of supporting new methods of value transfer. That means that the
companies that build and provide infrastructure for those methods are
currently at the mercy of a partner who basically wont help them.

I always try and make the charitable assumption about the motives of others
and my take on the banking <> digital currency relations is basically this:
Banks have a business model that has worked well for generations; they do a
little fractional reserve, they extract as many fees as they can invent, and
they centralize the control of wealth. The promise of digital currency is that
everyone will have the capability to do that for themselves. So, its not
surprising to me that it is hard for them to work with those of us who are
building bridges and on/off ramps between the two systems.

With all of that being said, I am sorry for all of the debit card users who
are currently without an off ramp, and I can assure you that the folks at
BitPay, Xapo, and all of the other companies that lost access to the EU are
working as hard as possible to bring those programs back online.

~~~
staplers
The irony of making it difficult to exit crypto means traditional banking will
long-term be on the losing end as people who buy into crypto (even as novelty)
won't want to "cash out" due to difficulty while realizing how convoluted the
fiat process is when viewed from the outside. They'll find ways to stay in
crypto and get things done.

~~~
vkou
This is false.

When you find that you can't sell your tulips for dutch guilder, you don't set
up a mirror economy that uses tulips for currency. Instead, you find tulip
prices collapsing, and yourself broke.

Why would my landlord, who is not vested in crypto, want to exchange goods and
services for bitcoins that he can't cash out to pay his contractors, taxes,
etc? Nobody wants to be paid in illiquid assets, what on earth would possess
him to get into that horror show.

~~~
toomim
Maybe that's what _you_ do, but that's not what _I_ do, and that's certainly
not the hacker way.

So instead of saying "this is false", you should be saying "well, this is
just, like, my opinion, man."

~~~
geezerjay
Your comment adds nothing to the discussion and only serves as an attempt to
disregard every point without any reason or fact, and simply because you
prefer not to face the facts.

~~~
toomim
It adds a datapoint (my own behavior) that contradicts the parent's claim of
what people will do.

I think what you really mean is "your statement does not contribute to _my
argument_ ," not "your statement does not contribute to _the discussion_."
There are arguments besides your own, and I am living proof that they live in
people.

------
boysabr3
I wonder why this happened. Visa is primarily a technology company - not a
financial institution. It's incentivesed to keep fraud on visa cards low (so
that merchants continue to accept it) and keep its ecosystem of issuers +
acquirers happy.

If I'm not missing anything, I believe this must have happened because of
unusually high levels of fraud on Bitcoin visa cards. Certain acquirers
might've complained about abnormal amounts of "shady" volume from WaveCrest
BINs.

Alternatively, Visa might have seen a settlement risk on WaveCrest's end. I.e.
Visa might be worried that fluctuations in BTCs price would put WaveCrest in a
position that they wouldn't be able to settle funds with Visa (and
consequently the acquirers + merchants).

Any other ideas on what could've prompted this? I think if this was anti-BTC
regulatory action, the prompt to turn off these cards would've come from
WaveCrest's banking partners and not Visa.

~~~
Kazamai
Tether

~~~
jaxytee
Exactly. The SEC has said they consider crytpos securities. That would mean
the fraudulent price manipulation in the crytpo space (Bitfinex treating
tether as USD and pushing up the bid) is securities fraud. This is probably
why Wells Fargo stopped clearing Dollar transactions for Bitfinex.

~~~
ActsJuvenile
Wire transfer fraud.

I am an insider in the Bitcoin industry, and within 1 day of opening a new
bank account we started seeing fraudulent wires flooding in. When we dug
deeper, it was shocking to see how many Americans' bank credentials have been
hacked. It takes almost no effort for a EEU/RUS hacker to send a wire from a
hacked bank account.

Once the fraudulent wire is sent, rest of the wire transfer system is
tediously manual. So wire network participants simply choose to block bank
accounts that receive repeated bad wires. This is why Wells Fargo cut out
Bitfinex and Visa has decided to stop working with Bitcoin companies.

ACH fraud is even more rampant because you can pull money from someone's
account without their consent (as long as they don't notice/contest within
certain number of days). Coinbase profit margin is 0.5% per trade, so they
need to keep their ACH fraud rate below that number to not lose money. ACH
fraud rate is well over 1% industry-wide. This is why I strongly believe that
Coinbase has to be losing massive amounts to ACH chargebacks.

~~~
throwaway2983
Regarding CB ACH, They had/have a huge exploitable hole in their ACH system
that a friend discovered by accident. Long story short, they credited them for
a large sum that they never took from his/her account. I won't put the exact
detail of how to trigger the error but suffice it to say it was shocking to
learn how a system that deals with large sums of real money could fail in such
a way (and likely in a repeatable manner although my friend didn't try as
repeating it would likely be seen as stealing).

It's really quite shocking how a ecosystem that touts decentralization has a
glaringly centralized failure point - the fiat exit exchanges. When one or two
of them goes, it will bring down the whole house of cards. And given how
shitty CB's software was (or maybe still is) I just hope I can get my gains
out before the whole thing comes crumbling down.

~~~
dajohnson89
man, gender-neutral pronouns are confusing.

~~~
DanBC
No, they're not.

The Discorientating Use of the Word "They":
[https://www.youtube.com/watch?v=i_xVAqJ-
NY0](https://www.youtube.com/watch?v=i_xVAqJ-NY0)

------
crypt1d
WaveCrest seems to be the card provider for all major crypto debit card
offerings. Its actually so popular among top searches for 'btc debit card'
that I'm starting to think they are actually running the show and just have a
few different front ends. Initially, they only closed visa cards for holders
that were outside of EU, but now it seems to include everyone. The issue seems
specific to EU-based Visa issuers. US ones seem unaffected, for now.

~~~
_0nac
The major exception is Monaco, although this is only hypothetical since they
haven't actually issued any cards.

It's also, ahem, a house of cards for its investors, but that's another story
told on my blog: [https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-
an...](https://gyrovague.com/2017/06/16/monaco-doing-the-math-on-an-ico-where-
the-house-always-wins/)

~~~
repomies691
I have always classified Monaco as one of those ICO projects where they don't
even plan to actually implement the business model. Because why would you when
you can just party 10 years in Ibiza with the raised ICO funds?

~~~
DarronWyke
Welcome to the world of cryptocurrency in general. It's the new dot-com boom.
How did that turn out last time?

~~~
sametmax
Very well for scammers and serious businesses, not so good for naive people.

There are more naive people than the other kinds.

------
synthmeat
Most interesting thing here is that this came without any prior notice to any
parties in the process, effective immediately.

Sure looks like someone pressed a panic button.

~~~
throwaway5752
Seems like it was a very bad business idea in the first place, and I'm
surprised it wasn't cancelled sooner. Before you downvote me consider the
business model of credit card processors, and how volatility and rapidly
deflating currency would effect their cash flow.

~~~
jstanley
> how volatility and rapidly deflating currency would effect their cash flow.

Not at all? You obviously don't understand what a bitcoin debit card is. It's
just like a normal debit card, but you fund it with bitcoin. The company you
get the card from sells your bitcoin for fiat currency at the time you make a
purchase (or at the time you top up the card, depending on how they do it).

The properties of bitcoin are completely irrelevant to the mechanics of the
card.

~~~
Kazamai
The liquidity to sell to fiat is drying up after many are realizing the
valuations for crypto are completely fraudulent. There is an astronomical
amount of centralized crypto printing going on that has corrupted the entire
crypto ecosystem. Tether just wrote in their legal terms that as a of January
1st tether can't be redeemed or used by Americans even though it backs USD.
Corrupt exchanges inflated the prices and issued worthless tokens to buy
bitcoin then sell it to main street. This is Bernie Madoff x 10,000.

~~~
xorcist
This is not true. Liquidity in these markets is steadily increasing. It is
easier now to sell large amounts of Bitcoin than it was two years ago, and it
was easier then than two years prior.

~~~
Kazamai
Have you tried to sell millions of dollars worth of bitcoin to USD? As soon as
there is a down day the exchanges shutdown and stop people from trying to
withdraw. The money to cash out billions doesn't exist. All these headlines of
founders being billionaires is false. $1.5 billion fake USD pumped crypto.
Good luck to anyone holding millions of dollars trying to cash out when the
market turns downward. This is adult musical chairs. There will be millions of
bag holders and rich exchange criminals.

~~~
xorcist
Moving the goalposts, are we? The question here was if "liquidity is drying
up", which is the opposite of what's happening. While you probably couldn't
move a billion, you never could and that's not a sign of anything drying up.

A million dollars perhaps used to be problematic, but is now a drop in the
bucket on any exchange's daily volume. A normal bank transfer will suffice,
but check with your bank if you aren't moving those amounts regularly. For
bigger volumes there is a quite functional OTC market as well.

------
thisisit
All bitcoin visa cards? My understanding is that bitcoin Visa was already
restricted to European countries since September:

[https://news.bitcoin.com/bitcoin-debit-cards-non-european-
re...](https://news.bitcoin.com/bitcoin-debit-cards-non-european-residents-
visas-new-rules/)

Mastercard joined:

[https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_...](https://www.reddit.com/r/Bitcoin/comments/75gu4d/mastercard_joins_visa_to_ban_issuing_btc_prepaid/)

So, now only Bitcoin Mastercard remains for European countries?

Edit: Added "Bitcoin" to make sure the gentleman below is not confused.

~~~
user5994461
Correction: Cards issued by bitcoin services were terminated.

Visa works perfectly fine like it always did. Let's not mix things up.

------
tobiaswk
Bitcoin is currently not what Bitcoin was when it was created. Slow peer-to-
peer transactions and high processing fees.

Average fees are hovering around 30 dollars. That's an average. Unconfirmed
transactions has been at over 100k for months. The mempool is also hovering
around an ATH. The Bitcoin is crippled. Sentences like "store of value" are
now the term used to describe Bitcoin. Very far from what the Bitcoin used to
be.

I think there is a real possibility of a "death spiral of the blockchain".
Fees will increase and it will become impossible to move coins on the
blockchain besides the upper 10% of bitcoin holders. For traders on exchanges
bitcoin seems fast; because no transactions are taking place. When you
actually decide to move your bitcoins to a wallet you own you'll pay high
fees... if not your transaction could take months to clear or never actually
clear.

No wonder Visa cards are being cancelled.

The fork that occurred on 1st August created Bitcoin Cash. This fork is much
closer to what the Bitcoin was. Bitcoin Cash is this today. Removal of the
segwit code (which hasn't solved anything), disabling of RBF (replace-by-fee)
enabling 0-confirmation transactions again. A new DAA (difficulty adjustment
algorithm). Finally increase the block size to 8MiB.

The Bitcoin has been crippled on purpose by Blockstream deep in the pockets of
bankers and insurance companies. Blockstream is the main contributor to the
Bitcoin development. Look at the sponsors;
[https://www.blockstream.com/about/#investors](https://www.blockstream.com/about/#investors)

Before the bankers, and their followers, got indirectly involved in Bitcoin
development there never was any discussion about limiting the block size to
1MiB; in fact the opposite was discussed. See;
[https://twitter.com/adam3us/status/636410827969421312?lang=e...](https://twitter.com/adam3us/status/636410827969421312?lang=e..).
[https://bitcointalk.org/index.php?topic=1314.msg15143#msg151...](https://bitcointalk.org/index.php?topic=1314.msg15143#msg151..).
[https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im...](https://np.reddit.com/r/btc/comments/71h884/pieter_wuille_im..).

Now all of this has led to a complete divide and clusterfuck of the community.
It is an very ugly and toxic environment and is sad to look at. On top of that
we now have thousands of alternative coins and blockchains.

~~~
wmeredith
"death spiral of the blockchain" or death spiral of Bitcoin? There's an army
of alt coins waiting to take its place. A lot of them are garbage, most are
OK, but a handful of them are brilliant.

Bitcoin was the proof of concept and it was very successful in that light, but
as a consumer product it is quite flawed. The survivors of the current bubble
will be the ones that change the world. I'm not sure Bitcoin will be among
them.

~~~
jcomis
which do you consider brilliant?

------
clemenspw
Only Wavecrest issued cards. For example, TenX will have Wirecard as a new
card issuer until they get their own banking license.

"Visa have today instructed us that we must close all WaveCrest issued Visa
Prepaid Cards."

This is Wavecrest specific, nothing to do with crypto.

~~~
LMYahooTFY
There appears to be a statement from /u/WirexApp stating it's more than
Wavecrest?

------
edpichler
Cryptopay pronounced: "Unfortunately, our card issuer instructed us to cease
all Cryptopay prepaid cards starting January 5th, 2018. All funds stored on
cards are safe and will be returned to your Cryptopay accounts ASAP. Sorry for
all the inconvenience caused, we’re working on the solution!"

[https://twitter.com/cryptopay/status/949243633911332864](https://twitter.com/cryptopay/status/949243633911332864)

------
lawlessone
Just a general AML clampdown ?

I can't imagine payment services are actually worried about bitcoin (yet at
least) ?

~~~
RickS
I can't imagine they wouldn't be. There's a lot of gray/black money in
bitcoin, and it has to get on the grid somehow. A debit card you can spend
anywhere is a dream come true for that.

~~~
TazeTSchnitzel
Big payment networks do not want to appear complicit in money laundering.

~~~
exelius
HSBC/RBS/Citi were fine with it; and given the amount of the fines, it was
plenty profitable and they’re likely still doing it.

~~~
user5994461
That's not correct. There is always some amount of fraud that manage to go
through all the checks. That doesn't mean it's intentional. And that certainly
doesn't mean that any financial service can stop doing any verification and
become a paradise for fraudsters.

~~~
jacquesm
> That doesn't mean it's intentional.

Except that of course it was:

[https://www.reuters.com/article/us-hsbc-probe/hsbc-to-
pay-1-...](https://www.reuters.com/article/us-hsbc-probe/hsbc-to-
pay-1-9-billion-u-s-fine-in-money-laundering-case-idUSBRE8BA05M20121211)

~~~
_jal
This is a great bit from the article:

"Mexican traffickers used boxes specifically designed to the dimensions of an
HSBC Mexico teller’s window to deposit cash on a daily basis."

------
kennyasare
Also, FWIW none of us make any money on offering these debit card products. We
actually do it to give people that have digital currency a quick off ramp.
Here is how the programs technically work:

1\. Infrastructure company pre funds an account with an issuing bank.

2\. User sends digital currency to infrastructure company to add to their
card.

3\. Infrastructure company receives that currency, and alerts bank to debit
their account for fiat.

4\. Infrastructure company has to find an exchange to trade OTC as often as
possible to protect against as much volatility as possible, while keeping in
mind the minimum OTC trade size is generally $250k USD.

5\. Infrastructure company has to wait 3 days for a wire to then add more
funds to the pre funded account.

~~~
JumpCrisscross
> _Infrastructure company has to find an exchange to trade OTC as often as
> possible to protect against as much volatility as possible, while keeping in
> mind the minimum OTC trade size is generally $250k USD_

One can loosely think of an appreciating cryptocurrency as a short-term loan.
You're out cash up front. Later, and only later, you get it back plus a little
more.

The infrastructure company in your example is thus, by turning
cryptocurrency's promise of cash tomorrow into cash today, providing maturity
transformation [1]. This is one of the core services of a bank. It is also an
inherently risky business on account of the asset-liability mismatch.

[1]
[https://en.wikipedia.org/wiki/Maturity_transformation](https://en.wikipedia.org/wiki/Maturity_transformation)

~~~
kennyasare
The "appreciating cryptocurrency" part is tricky though, right?

Speculating on currency prices is a business; it is *not however the business
that digital currency infrastructure companies are in.

~~~
JumpCrisscross
> _Speculating on currency prices is a business; it is not however the
> business that digital currency infrastructure companies are in_

Yes it is. It may not be how they market themselves. But it's the principal
risk they take and, directly and indirectly, the principal determinant of
their profitability.

~~~
kennyasare
I am literally the CEO of LitePay, I know the CEO's of the other
infrastructure companies, and it is NOT what our business are doing with the
Debit Card product.

We take the risk as a service to the community, and the product is a cost
center.

~~~
JumpCrisscross
> _We take the risk as a service to the community, and the product is a cost
> center_

JPMorgan Chase could just as well say it issues mortgages and accepts deposits
as a service to the country, that its retail operation is a cost centre for
the real business of this or that. (It was popular, before the crisis, for
banks to claim mortgages were simply a cost centre for winning wealth
management and investment banking business.)

The business you're in is the business from which you earn profits and in
respect of which you hold risks. Railroads and trucks [1], McDonald's and real
estate [2]...this is an adage in business as old as commerce.

[1]
[http://www.lessonsoffailure.com/tag/railroads/](http://www.lessonsoffailure.com/tag/railroads/)

[2] [https://qz.com/965779/mcdonalds-isnt-really-a-fast-food-
chai...](https://qz.com/965779/mcdonalds-isnt-really-a-fast-food-chain-its-a-
brilliant-30-billion-real-estate-company/)

------
ShabbosGoy
I wonder if this affects Monaco. I was interested in their value prop,
especially the ability to receive a low foreign transaction fee while
traveling.

------
edpichler
Sad news. I used cryptopay.me, but they haven't pronounced yet.

------
XnoiVeX
Just noticed WaveCrest is based out of Gibraltar. It seems quite easy to start
a company based in Gibraltar. What are the advantages or disadvantages? Just
curious.

~~~
snowpanda
\+ ~ 10% corp. tax rate (no VAT, gains tax etc.)

\+ the legal system is based on English law

\+ English is the first language

\+ time zone is central to Europe

\+ lots of things are allowed such as gambling (hence why online gambling
sites are located here often),

\+ Part of EU yet self governing. (well technically an UK Overseas Territory
but they are far from listening to anything the UK says).

\+ No exchange control...

etc.

------
scotty79
... and that's when credit card duopoly starts to bite.

------
arisAlexis
its a specific company that had non bitcoin products too

------
randomerr
That weird. Bitcoin has been on up swing the last 3 months since the insider
trading scandal has been dying down.

[https://www.coindesk.com/price/](https://www.coindesk.com/price/)

Maybe there's a crack down from EU on Bitcoin backed cards WaveCrest didn't
want to deal with it yet.

~~~
jacquesm
The pricing news on that page reads like a parody of what you read about
ordinary stocks.

------
turblety
I think this will be good in the long run. If VISA (and Mastercard) end up
allowing Bitcoin affiliated payments through their platform, then merchants
will end up not providing native support for crypto payments, as they can just
use their current infrastructure.

If we want to destroy these payment monopolies in place of a (more, but I
understand not completely) decentralized system, we need to encourage
merchants to just implement payments directly.

edit: typical hackernews. any pro bitcoin comments result in downvotes.

~~~
empath75
I can’t wait to wait 3 days and spend $30 in transaction fees to buy a Big
Mac.

~~~
s3nnyy
Right now I top up 10USD worth of Bitcoin with bitrefill.com.

I pay ZERO fees and it is instant (due to Segwit and the Lightning network).

~~~
s3nnyy
Why the negative reaction to this?

------
sametmax
First bitcoin was insignificant.

Then people made fun of it.

Now current institutions will have to choose between embracing it and fighting
it. Some of them do one thing, apparently VISA chose another.

~~~
doktrin
VISA most likely cares above all else about making money for VISA. Likewise,
Steam probably doesn't care _how_ people pay for their games : they just want
to be paid. If they move away from bitcoin, it's probably because they deem it
unviable / unprofitable / too much of a pain in the ass.

Not everything is a grand ideological battle, and there's no need to go
looking for complicated explanations when the simple and naive interpretation
makes eminent sense.

~~~
djsumdog
It's part of the general problem that bitcoin isn't really fungable for goods.
Maybe it was back when the value was more stable or grew slowly, or the
transaction fees were cheaper. But you're totally right. Currently it's barely
worth the effort compared to traditional payment system in many contexts.

