Crypto Startup Wyre Cements CEO To Get Back to Growth

Wyre is reaffirming commitment to its interim chief executive, a compliance and risk specialist with a law degree who steered the crypto payments processor out of dire financial straits mere months ago. 

Stephen Cheng, tapped as Wyre’s interim CEO in January, was named by the private company’s board as permanent chief executive on Monday, he told Blockworks in an exclusive interview. Cheng said Wyre is “returning to its core competencies” under his leadership. 

His permanent appointment appears telling of how the house views Cheng’s internal turnaround set in motion around the start of 2023. The company, according to a statement, now has customers in more than 100 countries and has facilitated more than $12 billion in transactions since it commenced operations in 2013. 

“I’m happy to say that now we’re in a position to really cement our foundation so that we could grow not just top line, but also bottom line,” Cheng said. 

Wyre’s back-to-basics shift has been fueled by a capital influx that suddenly shored up the ailing state of its own finances in January. 

Cheng declined to comment on the identity of Wyre’s eleventh-hour backer, who came in seven days after he was elevated to interim CEO. The Wyre chief executive also declined to specify the amount in question, which he called “strategic financing of a potential transaction.”  

Cheng is a lawyer with a number of high-profile compliance and risk-oriented positions on his resume. He’s worked in senior roles for companies including American Express and Green Dot Corporation, and he served as Prime Trust’s chief compliance officer before joining Wyre in August 2021. 

Wyre’s latest funding hit as the capital-starved company was forced to implement restrictions on customer withdrawals to protect its balance sheet. Those restrictions, which blocked withdrawals of excess of 90% of account value, turned out to be short-lived. 

Crypto boom to bust to…

Founded in 2013, Wyre grew to prominence as a player in the crypto infrastructure sector — mainly via heavy trader adoption and usage of its on- and off-ramps that bridge digital assets and fiat currencies. The San Francisco-based startup ballooned to a purported $1.5 billion valuation last year in a planned acquisition by Bolt Financial that never happened.

Bolt called off the deal in September 2022 as financial markets fell. A flurry of subsequent funding attempts — save contributions here and there from exiting Wyre backers — didn’t pan out, Cheng said. 

The company is tapping funds from a “strategic partner,” in part, to create a “robust risk management” system that puts compliance measures at the internal forefront, he said. 

“A lot of times what I do is I go into a business where the growth has gone so fast, and the technology has exceeded the pace of the risk management system,” Cheng said. “So, I go in, and I help renovate or modernize that risk management program so that it not only catches up to the growth, but now it would be in a position to scale, as well.” 

The hope is that the approach begins to start “engendering or regaining” trust when it comes to both customers and counterparties, he said, adding that he was speaking in general terms. 

On the counterparty front, crypto wallet solution MetaMask revoked its Wyre integration in early January as news of the company’s troubles started to bubble — including word reportedly spread by a couple of ex-employees that the company’s closure was likely imminent. Ioannis Giannaros was Wyre’s CEO at the time. 

Wyre’s support of debit and credit cards to buy cryptocurrencies had positioned the company to capitalize on a boom of bull market digital asset interest. But the company’s lack of funding, according to industry participants and previous reporting, left it exposed to bearish conditions. 

‘More with less’

Public pressure neared a boiling pot when the company restricted withdrawals.

Wyre laid off employees to right the ship. The company had somewhere between 150 to 200 employees at its peak, Cheng said — and it now has about 50. 

The slimming down has come with Cheng and his team putting in place a series of internal and external safeguards designed to ensure what happened in January doesn’t happen again. 

“In line with just global macroeconomics, everyone’s learning how to do more with less,” he said.

“And our approach to it is to really be data-driven and technology-oriented, because we’re ultimately also a technology company, so that we [can] scale and be optimal with our resources.”

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