Crypto.com struggles to maintain Fiat ramps in face of crypto banking crisis
The Singapore-headquartered exchange is only now able to offer banking services in euros to users in the European Economic Area (EEA), after losing the ability to accept USD deposits due to problems with its banking partners.
An exchange that only has the ability to serve users in one part of the world, and then in euros, a far less liquid currency for crypto (most crypto trading pairs are denominated in USD), will have questions about its liquidity.
“Our EUR fiat wallet service provider recently reduced access to EEA residents via one euro [payments area (SEPA) system]”, a spokesperson for Crypto.com told CoinDesk.
“As SEPA’s intended purpose is to facilitate local borderless transfers between network participants within the EEA, EUR deposits/withdrawals via this service provider are not available to non-EEA residents,” the spokesperson added.
All this comes as Crypto.com has faced turbulence due to its relationship with two banks and broader fallout in the crypto industry.
Crypto.com’s previous banking partner was Transactive Systems, which had licenses in the UK and Lithuania. The Lithuanian central bank, which also has the role of market regulator for the country, ordered the company to stop trading in virtual currencies in January due to “serious violations” of anti-money laundering laws.
Four managers of the company have been charged in the US with mail fraud and money laundering. Provincial authorities in British Columbia, home to the company, are seeking to seize more than C$17 million ($12.31 million) in property belonging to executives via a civil forfeiture action.
Crypto.com lost the ability to receive USD fiat deposits when its US-based banking partner, Metropolitan Commercial Bank, left the crypto industry in January following a board review.
The exchange still offers the option for users to buy crypto via credit card, and in September began waiving fees for new users in the first week.
A spokesperson for Crypto.com declined to name the exchanges as specific banking partners, saying only that it works with a “variation.” They said a migration to a new payment provider was completed on January 25.
Data from the blockchain analytics platform Nansen shows that the Crypto.com currency has a currency balance of $3.6 billion and a stablecoin balance of $776 million. It has also seen a positive net flow of $248.8 million in the past week.
There are currently 297 active addresses for CRO, Crypto.com’s exchange token, a proxy for the number of engaged power users on the platform (owners of the exchange token get fee discounts on trades).
That number is down from about 1,100 in mid-January, during the mini-bull market, and 10,000, when the exchange bought sponsorship rights for the National Basketball Association’s Los Angeles Lakers arena.
CRO is down 16% in the last 30 days, and 82% on the year.
