Business 26 October 2018Erik Gibbs
Danish crypto exchange goes bankrupt thanks to credit card supplier
The Wemovecoins cryptocurrency exchange in Denmark is no more. The exchange provided a platform for users to buy and sell cryptocurrency using a credit card or a bank transfer, but has been forced into bankruptcy. According to the exchange, it was obligated to shut down because of dispute between the company and a credit card vendor.
The dispute led the vendor to refuse to pay the exchange its share of the funds processed by the vendor. According to an article by the Danish tech news outlet Computerworld, Wemovecoins filed for bankruptcy earlier this month. A lawyer working on the case, Niels Juul Mathiasen, “This credit card vendor has withheld the company’s liquidity, [which is] why the company ran out of money and could not continue its operations.”
In a statement from the exchange, it added, “[T]here has been uncertainty about the company’s ability to continue operations, as the company’s liquidity is detained by the credit card issuer concerned. If the funds are not released, the company will not be able to continue its operations.”
The exchange is confident that the issue will be resolved and that it will be able to continue operating. The company’s CEO, Fredrik Grothe-Eberhardt, told the Danish news outlet Finans, “We hope to buy back the website and reopen the business within three or four months.”
The Danish cryptocurrency market isn’t the largest, but it is solid. This is despite attempts by the country’s banks to prohibit digital currencies. The largest bank in the country, Danske Bank, has recommended against crypto and even banned cryptocurrency investments this past April. It said that cryptocurrency can’t offer the same protection offered by traditional currencies or investments, adding that there is a great lack of transparency regarding cryptocurrencies’ underlying value and that the crypto ecosystem was nothing more than a vehicle for financial crime and money laundering.
The bank’s position would be comical if it weren’t so depressing. Just a few days ago, reports surfaced following an undercover operation that banks throughout Europe—including in Denmark—had helped users steal over $60 billion. Additionally, Danske Bank is the subject of an investigation by the U.S. government over claims that it allowed over $235 billion to be illegally funneled through a branch in Estonia.
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