TL:DR
•Visa is cutting off its partnership with FTX following the latter’s bankruptcy filing last week, confirmed on Sunday.
• This spells the end for FTX-branded Visa debit cards, which the company said would be wound down.
• The cards were previously available to FTX account holders in the U.S., and were set to be rolled out to 40 new countries as part of a “long-term global partnership” announced by the two companies in early October.
Visa Ends Relationship
On Sunday, it was announced that Visa is cutting off its partnership with FTX following the latter’s bankruptcy filing last week. This spells the end for FTX-branded Visa debit cards, which the company said would be wound down. The cards were previously available to FTX account holders in the U.S., and were set to be rolled out to 40 new countries as part of a “long-term global partnership” announced by the two companies in early October.
The cards allowed users to spend their cryptocurrency holdings as fiat currency anywhere that Visa was accepted. However, FTX said that it had been notified by Visa that its account with the payment processor had been closed. In a statement, FTX said: “We regret to inform our users that we have received notice from our issuer that our FTX Visa card program has been shut down and will be winding down over the next few weeks.” The move comes as a blow to those who were hoping to use cryptocurrencies in their everyday lives, but it is not likely to dent the overall cryptocurrency market.
FTX
FTX was founded in 2019 by Sam Bankman-Fried, who is also the CEO of Alameda Research, a crypto trading firm. It has since become one of the largest cryptocurrency exchanges by trading volume. However, the company has been marred by controversy, with some accusing it of market manipulation. FTX is also one of the few cryptocurrency exchanges that offer leverage trading, which allows users to trade with borrowed money. Leverage trading is generally considered to be riskier than traditional trading.
In June 2020, FTX received a $100 million investment from Binance, one of the world’s largest cryptocurrency exchanges. The investment was made through Binance’s investment arm, Binance Labs. Shortly after the investment was announced, Binance CEO Changpeng Zhao said that he saw “a lot of potential” in FTX and that he was “bullish” on the company’s prospects.
That soon changed as the relationship between CZ and Sam soured. CZ made some rather calculated moves that brought the truth to light about Sam’s company Alameda Research and the FTT token that baked most of the trades on FTX and Alameda. The token was found to be spurious at best and upon that knowledge the house of cards that Sam made came tumbling down.
The end of the FTX-Visa partnership is yet another blow to the embattled cryptocurrency exchange. FTX has been mired in controversy since its inception, and this latest development is likely to further damage its reputation. It remains to be seen whether FTX will be able to weather this storm and emerge unscathed—or if this will be the nail in the coffin for the embattled crypto exchange.
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