- Visa said it has terminated its partnership with defunct exchange FTX to issue debit cards in 40 countries around the world.
- The company said it is closely monitoring the developments in the FTX situation.
- Miami Heat, Golden State Warriors, Mercedes Formula One, GameStop, and others have also paused or ended their relationships with FTX.
Global payment processing giant Visa has terminated its worldwide debit card partnership with the defunct crypto exchange FTX, according to a report by Reuters.
“The situation with FTX is unfortunate and we are monitoring developments closely. We have terminated our global agreements with FTX and their U.S. debit card program is being wound down by their issuer,” a Visa spokesperson told Reuters.
Visa entered into a partnership with FTX in early October. The firm had agreed to issue crypto debit cards and enable crypto payments in 40 countries around the world, starting with Latin America.
The debit cards were supposed to be directly linked to users’ FTX accounts, which would’ve allowed them to pay for goods and services with their digital assets.
Visa is one of the dozen companies that have recently paused or completely ended partnerships with FTX. Miami Heat has terminated its relationship with FTX and is looking for another sponsor to replace the bankrupt exchange. FTX had a 19-year long, $135 million sponsorship deal with the NBA team that included naming rights to the organization’s arena.
Golden State Warriors, another NBA team, has also suspended its commercial relationship with FTX, which included in-arena promotions and advertisements. The Mercedes Formula One team has likewise put on pause its partnership agreement with the exchange.
GameStop, the video game retailer that’s venturing into cryptocurrencies, has also terminated its pilot gift card marketing partnership. It said it will refund the impacted customers.
Multiple venture firms and companies have been affected by the fallout of FTX. Sequoia Capital has marked down its $213.5 million investment in the exchange to $0. Crypto lender BlockFi, which has a $400 million line of credit from FTX, has halted all withdrawals. Crypto venture firm Sino Global Capital has revealed that its exposure to FTX amounts to mid-seven figures.
FTX Group companies, including FTX.com, FTX US, and Alameda Research, filed for Chapter 11 bankruptcy last Friday. The firm allegedly has a $10 billion hole in its balance sheet. Reports say FTX sent billions of dollars of customer deposits to Alameda where the funds were used in risky, leveraged bets.
On the Flipside
- It’s unclear at what stage Visa was in its FTX Visa debit card development before the blowup of FTX
- Other companies have only suspended their partnerships with FTX, instead of ending them completely.
Why You Should Care
Visa is the world’s largest payment processor. The company’s decision to partner with FTX a month before the shocking revelations raise questions about Visa’s due diligence process, as well as FTX’s ability to hide evidence. In any way, what could’ve been a giant step towards greater crypto adoption has become a hard blow to the crypto industry’s reputation.