Back in January, CoinGeek asked whether Wyre was to be the next digital currency company to shut down. It turns out that question was the right one to ask; this week, Wyre announced it would shut down in July.
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.
— Wyre (@sendwyre) June 16, 2023
At the time, we drew attention to the fact that Wyre was limiting customer withdrawals and making a big deal of the fact it had secured new financing after a deal to acquire it for $1.5 billion fell through the previous September. As these events indicated, it appears that all was not well at Wyre, and now the decade-old firm that dubbed itself the “infrastructure for the new economy” is winding down.
As the official tweet indicates, Wyre cited “market conditions” as its reason for folding, reassuring customers that it would be open for withdrawals until July 14, after which there will be a recovery process for the digital currency that remains on its platforms.
It’s yet another example of how once-mighty companies at the heart of the so-called decentralized revolution have fallen as the lies at the heart of the narrative fall apart.
Opinion: What market conditions have caused Wyre to fold?
It’s difficult to know where to start with such a question, given the massive cloud of darkness hanging over the industry and what is likely to come soon.
It all started when things started to unravel after UST/LUNA collapsed in 2022, causing the biggest wave of destruction the digital currency industry has ever seen. Previously godlike figures like Su Zhu and Kyle Davies of Three Arrows Capital (3AC) found themselves out on the street as their hedge fund collapsed, and digital currency lending platforms like Celsius Network went under.
Soon after, offshore exchange FTX collapsed, and digital currency trading ‘genius’ Sam Bankman-Fried was exposed as a massive fraud. Needless to say, this dented confidence in the industry, leaving prominent businessmen like Kevin O’Leary with egg on their face.
Yet, despite some price stabilization in major ‘assets’ over the past six months, things have gone from bad to worse. Fulfilling its promise to bring an end to the Wild West era in the industry, the U.S. SEC has taken aim at major centralized exchanges Binance and Coinbase and has named ADA, SOL, MATIC, and several other heavily-traded tokens unregistered securities, causing multiple exchanges to delist them.
It’s as yet unclear how Coinbase (NASDAQ: COIN), Binance, and others will sort things out with the SEC, if they can at all. However, one thing is clear: the days of listing any and every token willy-nilly, pumping prices with Tether, wash trading, and allowing insiders to dump on naive retailers is over, and that’s weighing heavy on the sentiment in a market that does little else.
Wyre is just the latest domino to fall in a wave that will eventually engulf the majority of centralized companies in the industry; it’s highly likely that, given all of the above, the company could not secure new financing.
As retail traders, institutions, and governments wake up to the reality that the emperor has no clothes, it will be a long time before anyone takes a risk-on approach to trading worthless tokens tied to technically broken blockchains.
Expect more companies to fold in the weeks and months to follow. As always, CoinGeek will be here to report on it as the carnage we have long predicted unfolds.
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