Only a month after payments giant Visa announced a partnership with FTX to roll out a debit card program in 40 countries worldwide, Visa abruptly ended the program due to FTX‘s recent insolvency and bankruptcy issues.
FTX’s liquidity issues were triggered last week when Binance CEO Changpeng “CZ” Zhao announced that Binance would liquidate the entirety of its FTX Token (FTT) holdings, which inadvertently led to a bank run that brought on FTX liquidity issues.
In October, when the news of FTX and Visa’s partnership circulated online, the native cryptocurrency of the FTX trading platform, FTT, spiked by about 7%, reaching a high of $25.62. After the recent turn of events, FTT is currently trading at $1.89.
Things have quickly spiraled for the once reputable cryptocurrency exchange FTX, and it comes as no surprise that companies like Visa are working to distance themselves from the disgraced platform.
“The situation with FTX is unfortunate and we are monitoring developments closely. In all our undertakings—in digital currency and beyond—our focus on security and trust remains paramount. We have terminated our global agreements with FTX and their US debit card program is being wound down by their issuer,” a Visa spokesperson told Cointelegraph.
Visa is not the only company severing ties with FTX. On Nov 11, Cointelegraph shared that The Securities and Exchange Commission of Cyprus, or CySEC, reportedly issued a statement amid FTX’s filing for Chapter 11 bankruptcy in the United States requesting the exchange halt operations for its Europe arm.
In another instance, Plaid, the fintech company which facilitates communication between financial services apps, and users’ banks and credit card providers, suspended FTX US access to its products, citing “concerning public reports” of fraudulent activity.