You probably remember "visagate", or the last week episode in which all crypto debit cards issued with WaveCrest Holdings had to be suspended without notice, due to WaveCrest's noncompliance with Visa rules. One of the companies hit by this storm was Bitwala.
In an email sent to their customers today, Bitwala revealed that not only the debit card partnership has been terminated, but also their bank account.
On December 29th our bank notified us that our account was being looked into and in the interim all transfers will be disabled. We disabled bank transfers from our dashboard and emailed users with pending transactions to expect delays.
After doing everything possible to restore our account, the bank informed us yesterday that due to a change in their policies, they have decided to terminate our relationship and that the closure would be permanent.
Although they took a pretty bad hit, in this said email they revealed plans to launch as a "crypto bank".
Bitwala will relaunch as a crypto bank. After working for over a year on our deal, we’ve finally reached an understanding with a German white-label banking partner. Our bill payment and card services will return for businesses and individuals and will both be migrated to the new platform and be able to open full bank accounts with us.
Alas, the relaunch seems to be tedious and time consuming, as the exact launch date under this new paradigm is yet to be known:
We are working very hard to relaunch in mid-2018.
Interestingly enough, their plans for having an ICO for this crypto bank, with an "equity token", are still on.
I take this whole story as a symptom of a deeper polarization between legacy banking systems and blockchain-based crypto to fiat bridges.
Hard to tell which one has more momentum now, but it's clear there's a gap growing on very fast between these two worlds.
I'm a serial entrepreneur, blogger and ultrarunner. You can find me mainly on my blog at Dragos Roua where I write about productivity, business, relationships and running. Here on Steemit you may stay updated by following me @dragosroua.
If you're new to Steemit, you may find these articles relevant (that's also part of my witness activity to support new members of the platform):