SpankPay, a crypto payment tool for adult entertainment ecosystem SpankChain, has announced it is shutting down.
The payment processor and wallet alleged that the targeted shutdown by Wyre was due to SpankPay’s business.
Failure to secure other service providers
SpankPay said in a Twitter announcement that Wyre’s new payment processor does not support adult entertainment businesses. Furthermore, the platform also mentioned that other service providers rejected SpankPay for the same reason.
“Operating SpankPay in a hostile banking environment has always been challenging, but the increasing attacks have become untenable for our small team and the niche market we serve,” the platform noted.
SpankPay partnered with Wyre as their payment provider and crypto custodian to honor all bank transfers made on SpankChain. Sharing a contract termination letter from Wyre, SpankPay said, “This came as a shock, given that our relationship with Wyre had been supportive and respectful up to this point.”
Meanwhile, it assured users that the funds were safe and would be returned to their users.
SpankPay Is Troubled By Wire
SpankChain, an adult content platform, is built on Ethereum. Through SpankPay, it operates cryptocurrency payments, enabling blockchain to remove third-party intermediaries and unfair payment practices in the adult industry.
Back in January and February, the adult payments platform halted withdrawals on the back of account closures by Wyre. BeInCrypto cited reports from earlier this year alleging that Wyre was going out of business. On the back of this, customers faced withdrawal limits. Several companies such as Juno and Ledger Support confirmed payments with alternative partners amid the crisis.
Meanwhile, SpankPay is reportedly lobbying Congress to stop banks from discriminating against adult companies and artists. It noted in the thread, “With SpankPay being discriminated against due to the nature of our business, we are as motivated as ever to end these extra-legal censorship practices implemented by financial institutions.”
According to Crunchbase, SpankChain received $6 million in financing through an initial coin offering (ICO) in 2017.
Business fails amid widespread weakness
The SpankPay announcement also coincided with weakness in the broader markets. The failures of Silvergate, Silicon Valley Bank and Signature came as the sector was beginning to recover from the demise of FTX, setting off a domino effect in mainstream finance.
However, bitcoin has posted gains, with the market capitalization of all cryptocurrencies surpassing $1 trillion in the past week. At press time BTC is trading between $27,500 and $28,000.
BeInCrypto has reached out to the company or the person involved in the story for an official statement regarding the recent development, but has yet to hear back.