Michael Bodley

Wyre is winding down.



Plagued by deep seated financial and reputational problems, the cryptocurrency payments and infrastructure company said it would shutter on Friday, citing “market conditions.”&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">After nearly a decade, Wyre is winding down. Due to market conditions, we made this decision to protect the best interest of our key stakeholders and customers. This decision is not due to any regulatory agency direction. Wyre continues to secure customer assets.&mdash; Wyre (@sendwyre) <a href="https://twitter.com/sendwyre/status/1669688772844220418?ref_src=twsrc%5Etfw">June 16, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



The shifting US regulatory landscape — which has repeatedly remained top of mind for industry participants throughout 2023 — did not play a role, according to the company. A former spokesperson for Wyre told Blockworks on Friday that the firm was no longer a client.&nbsp;



Wyre in April elevated Stephen Cheng, formerly the 10-year-old company’s interim CEO, to its permanent chief executive role. Chen at the time said the company was in “a position to really cement our foundation so that we could grow not just top line, but also bottom line.”



Read more: <a href="https://blockworks.co/news/wyre-crypto-ceo">Crypto Startup Wyre Cements CEO To Get Back to Growth</a>



Cheng in April said the company had been stabilized by a capital raise from an unspecified backer at the beginning of 2023, and he declined to identify that backer or to give additional details regarding the fundraise.&nbsp;



The word toward the end of 2022 and into the beginning of this year <a href="https://blockworks.co/news/from-1-5-billion-to-0-crypto-payments-platform-wyre-shuts-down">was that Wyre was set to cease operations</a> following a planned acquisition by Bolt that never materialized. That didn’t <a href="https://www.theinformation.com/articles/what-went-wrong-at-wyre-the-crypto-payments-startup-that-went-from-1-5-billion-deal-to-last-ditch-rescue">happen</a> then.



The company had moved to put in place weighty restrictions around cryptocurrency deposits and withdrawals via its platform. And <a href="https://blockworks.co/news/in-about-turn-crypto-payments-platform-wyre-secures-funding">then the rescue financing landed</a> — which the company said pumped the brakes on any pending additional interruptions to customer services.&nbsp;



Wyre on Friday said customer assets remained safe, and would be available to be withdrawn through the platform’s standard process through July 14.&nbsp;



A lawyer and a veteran of the likes of American Express and Prime Trust, where he held the title of chief compliance officer, Cheng was installed by Wyre’s board to leave the company out of that turbulent period.



He previously told Blockworks that the company had put in place a number of compliance safeguards that had been lacking and was positioned for future growth.



Wyre, founded in 2013 as one of the now-oldest cryptocurrency companies, was valued at $1.5 billion last year as momentum built around the Bolt deal.&nbsp;



It had as many as 200 staffers at its peak and was down to 50 in April, with Cheng then saying the company would have to do “more with less.”



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Wyre

Wyre winds down — for real this time

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.&nbsp;



“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.&nbsp;



Wyre’s back-to-basics shift has been <a href="https://blockworks.co/news/in-about-turn-crypto-payments-platform-wyre-secures-funding" target="_blank" rel="noreferrer noopener">fueled by a capital influx</a> 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.”&nbsp;&nbsp;



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.&nbsp;



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.&nbsp;



<h2 class="wp-block-heading">Crypto boom to bust to…</h2>



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.&nbsp;



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.&nbsp;


<div class="wp-block-image">
<figure class="alignright size-large is-resized"><img loading="lazy" decoding="async" src="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=1024&amp;h=1024" alt="" class="wp-image-51705" width="197" height="197" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=2560 2560w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=150 150w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=1536 1536w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=2048 2048w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=257 257w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=261 261w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=219 219w, https://blockworks-co.imgix.net/wp-content/uploads/2023/04/stephencheng-scaled.jpg?w=80 80w" sizes="auto, (max-width: 197px) 100vw, 197px" /><figcaption class="wp-element-caption">Wyre CEO Stephen Cheng | Photo source: Wyre</figcaption></figure></div>


“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.&nbsp;



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 <a href="https://blockworks.co/news/from-1-5-billion-to-0-crypto-payments-platform-wyre-shuts-down" target="_blank" rel="noreferrer noopener">word reportedly spread by a couple of ex-employees</a> that the company’s <a href="https://www.axios.com/2023/01/03/wyre-shutdown-crypto-winter" target="_blank" rel="noreferrer noopener">closure</a> 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.&nbsp;



<h2 class="wp-block-heading">&#8216;More with less’</h2>



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.&nbsp;



“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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crypto payments

Crypto Startup Wyre Cements CEO To Get Back to Growth

Shalini Nagarajan

In a quick reversal, crypto checkout gateway Wyre is removing a recently-imposed withdrawal limit and announced it will continue operations as usual.



Wyre said in a Thursday <a href="https://twitter.com/sendwyre/status/1613673423032418306">update</a> that it received funding from an unnamed partner, allowing it to deliver services without interrupting withdrawals.&nbsp;



“We will resume accepting deposits and lift the 90% withdrawal limit effective immediately,” the company said in a Twitter thread.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">As a regulated financial insitution, we’re proud that we were able to continue delivering our services in a safe and sound manner without pausing withdrawals. We will resume accepting deposits and lift the 90% withdrawal limit effective immediately.&mdash; Wyre 🔊 (@sendwyre) <a href="https://twitter.com/sendwyre/status/1613673424370700289?ref_src=twsrc%5Etfw">January 12, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Founded in 2013, Wyre provides payment infrastructure for crypto applications and supports services like custody wallets, transfers and swaps, and know-your-customer (KYC) onboarding.&nbsp;



Wyre was <a href="https://blog.sendwyre.com/wyre-joins-visas-fintech-fast-track-program-906c5cb348e6">added</a> to Visa’s FinTech Fast Track Program in Apr. 2021, allowing Wyre’s users to smoothly move money between crypto and fiat, via new offerings like instant payouts of their crypto into their fiat bank accounts.&nbsp;



Earlier this month, it was believed that Wyre would shut down its business after payments firm<a href="https://blockworks.co/news/from-1-5-billion-to-0-crypto-payments-platform-wyre-shuts-down"> Bolt Financial ditched a $1.5 billion deal</a> to buy the firm.



Founder Ioannis Giannaros told employees in an email to “brace themselves for the fact that we will need to unwind the business over the next couple of weeks,” Axios reported on Jan. 4.



However, Giannaros separately told the outlet that it was “still operating but will be scaling back to plan our next steps.”



Crypto wallet providers <a href="https://twitter.com/MetaMask/status/1611112520944701440">MetaMask</a> and <a href="https://twitter.com/brave/status/1611364031096307712">Brave Software</a> then announced that they would end support for Wyre and warned users not to use the service.



Wyre, once valued at $1.5 billion, sparked further concerns about its business when it <a href="https://twitter.com/sendwyre/status/1611774171050299392">tweeted</a> on Jan. 7 that it would limit customer withdrawals to 90% of their asset balance.



Giannaros also stepped down as CEO and taken on the role of executive chairman, while Chief Risk Officer Stephen Change would become interim CEO, the company said.



Wyre didn’t return Blockworks’ request for comment by press time.



“Our operations continue and we will share information with the community as it is available,” the company concluded.

Funding

In About-turn, Crypto Payments Platform Wyre Secures Funding

Bessie Liu

Crypto payments and infrastructure provider company Wyre is shutting down, months after Bolt Financial scrapped a $1.5 billion deal to buy the firm.



Wyre was first founded in 2013 by Michael Dunworth and Ioannis Giannaros and had raised a total <a href="https://www.crunchbase.com/organization/wyre/company_financials" target="_blank" rel="noreferrer noopener">$29.1 million</a> across nine rounds of funding, data from Crunchbase shows. Some of its investors include Pantera Capital, Stellar Development Foundation and Amphora Capital. 



Michael Staib, who previously worked as a technical engineer for Wyre, <a href="https://www.linkedin.com/posts/michael-staib-482610205_wyre-openforwork-activity-7014745625246277632-eTC9/" target="_blank" rel="noreferrer noopener">posted</a> on his LinkedIn profile on Dec. 31, 2022, that, “Wyre won’t continue as a profitable business.”



Former employees <a href="https://www.axios.com/2023/01/03/wyre-shutdown-crypto-winter" target="_blank" rel="noreferrer noopener">told Axios</a> that Giannaros had sent an email during the holiday season informing team members that Wyre would liquidate and terminate its offerings in January 2023. It is alleged that no severance will be provided to employees. 



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">Looks like Wyre just shut down their business Everyone in our shared Slack channel disabled except the GC. Hearing no severance.&mdash; JD Ross (@justindross) <a href="https://twitter.com/justindross/status/1610361870430441479?ref_src=twsrc%5Etfw">January 3, 2023</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Giannaros has not replied to Blockworks’ request for comment.



Dunworth stepped down from Wyre and cashed out 12.5% of his holdings at the company soon after tech platform <a href="https://blockworks.co/news/bolt-in-1-5b-tie-up-with-crypto-infrastructure-provider-wyre">Bolt failed to acquire the company</a> in September last year. 



<a href="https://www.afr.com/technology/aussie-crypto-founder-sees-his-267m-windfall-disappear-20220915-p5bifg#:~:text=Wyre%20founder%20Michael%20Dunworth%20sees,weight%20of%20US%20tech%20wreck" target="_blank" rel="noreferrer noopener">According to Dunworth</a>, crypto market volatility and general market conditions in tech had been one of the main reasons for the deal falling through.&nbsp;



Fintech writer Noah Weidner suspects that the company may have experienced balance sheet issues as early as September.



“I sent an email to Wyre some months back asking about their Yield product — in large part because Wyre+Yield was used by a bunch of small CeDeFi and fintech apps,” he <a href="https://twitter.com/noahweid/status/1610404084498014208" target="_blank" rel="noreferrer noopener">tweeted</a>. “Their response insinuated Wyre+Yield had been closed for months, but some apps were still using it for their treasury.”



Wyre&#8217;s now-failed acquisition had been considered monumental, as the $1.5 billion valuation <a href="https://blockworks.co/news/bolt-in-1-5b-tie-up-with-crypto-infrastructure-provider-wyre">would have been one of the largest non-SPAC deals</a>. The payments platform’s decision to shut down operations may signify the prolonged crypto winter ahead.



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bankruptcy

From $1.5B to $0, Crypto Payments Platform Wyre Shuts Down

Ben Strack

<div id="highlights-block_624f2c08283ff" class="highlights">
 <ul>
 <li>Blockchain payments infrastructure “will become a core part of the new financial system,” Architect Partners associate says</li>
 <li>“We want to allow every retailer to transact easily in cryptocurrency,” Wyre CEO Ioannis Giannaros said</li>
 </ul>
 
</div>



Shopper network company Bolt is set to acquire cryptocurrency infrastructure provider Wyre. The combined company will seek to allow every retailer to easily transact using cryptocurrencies.



The deal, expected to close later this year, comes amid growing demand for purchasing goods and services with crypto and the opportunity of Web3, the company said in a statement Thursday.



The acquisition is valued at roughly $1.5 billion, sources familiar with the matter told Blockworks, making it among the largest crypto mergers not involving a SPAC (Special Purpose Acquisition Company). It surpasses Galaxy Digital’s planned $1.2 billion purchase of institutional crypto platform BitGo, which <a href="https://cms.blockworks.co/awaiting-us-listing-galaxy-digital-delays-purchase-of-crypto-platform-bitgo/" target="_blank" rel="noreferrer noopener">has not yet closed</a>.



Founded in 2014, Bolt allows tens of millions of shoppers in its network to check out with one click while offering authentication and fraud protection. Hundreds of retailers use Bolt to offer a quicker experience to customers.



The flagship product from Wyre, which has been involved in the crypto space since 2013, is its fiat-to-crypto gateway. The company has on-ramped roughly 15 million end users to its partners and has processed more than $10 billion in payments.



Together, <a href="https://www.bolt.com/" target="_blank" rel="noreferrer noopener">Bolt</a> and <a href="https://www.sendwyre.com/" target="_blank" rel="noreferrer noopener">Wyre</a> plan to build commerce solutions and secure crypto usage for millions of shoppers, retailers and developers.



Integrating crypto within Bolt’s one-click checkout infrastructure has always been a core part of its vision, according to Bolt CEO Maju Kuruvilla.



Roughly 40% of crypto-paying customers are brand new for these companies, and they tend to spend nearly twice as much as regular credit card users, he added.



“More and more companies are realizing the pressing need to simplify the crypto purchasing experience, as cryptocurrencies continue gaining popularity and Web3 promises to be a new cornerstone of the future,” Kuruvilla told Blockworks in an email. “These opportunities and trends are poised to continue growing, and Bolt and Wyre’s partnership sends a strong signal that we plan to be the leader in tomorrow’s market.”



Bolt will be able to securely exchange crypto to fiat, enabling retailers to accept crypto as a payment method. It will also allow Bolt users to purchase NFTs using Wyre&#8217;s interface.



“We want to allow every retailer to transact easily in cryptocurrency, removing long-standing barriers,” Wyre CEO Ioannis Giannaros said in a statement.



<h3 class="wp-block-heading">The crypto mergers and acquisitions landscape</h3>



Bolt’s buy of Wyre highlights blockchain-payments as a critical piece of the crypto ecosystem, according to Ryan McCulloch, an associate at mergers and acquisitions (M&amp;A) advisory firm Architect Partners.



“While the practical timing and implementation of the blockchain payments infrastructure remains unclear, it is clear that this will become a core part of the new financial system,” he told Blockworks.



Over the last 12 months, legacy payments providers have made significant acquisitions to ensure they&#8217;re able to capitalize on the opportunity, McCulloch added.



Canadian payments giant Nuvei <a href="https://nuvei.com/company/press-releases/nuvei-to-acquire-simplex-a-payment-solution-provider-to-the-cryptocurrency-industry/" target="_blank" rel="noreferrer noopener">acquired</a> crypto payments company Simplex for $250 million last year. More recently, <a href="https://cms.blockworks.co/facebook-led-crypto-project-diem-to-be-sold-off-for-200m-report/" target="_blank" rel="noreferrer noopener">Silvergate acquired Diem</a> for roughly $200 million in January.



There were 174 crypto mergers and acquisitions last year, according to Architect Partners data — nearly triple the amount from 2020. The number of such deals in 2022 is just behind last year’s pace, as 40 crypto M&amp;A transactions took place during the first quarter.



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