Crypto Card Volumes Surge 7,000% as Infrastructure Giants Exit Amid Regulatory Squeeze

Woofun AI reports that the crypto card infrastructure sector is undergoing a severe structural correction, marked by the simultaneous operational failures of two key providers, Fiat24 and Kulipa, which have immediately disrupted services for major wallet ecosystems including SafePal, Bitget Wallet, imToken, Ready, and Solflare.

The collapse of Kulipa represents a stark anomaly in venture capital performance, as the platform announced its cessation of operations due to overwhelming debt pressure merely months after securing a $6.2 million seed round. This financing was led by prominent institutional investors Flourish Ventures and 1kx, entities typically associated with high-growth potential, making the rapid descent into insolvency a signal that capital injection alone cannot sustain the heavy operational burdens of crypto card issuance.

Concurrently, Fiat24 executed a strategic retreat rather than a total shutdown, suspending its high-risk Crypto Top-Up feature and halting the onboarding of new users. As a critical provider of bank accounts, fiat currency clearing, and card issuance capabilities, Fiat24’s withdrawal from these specific services has severed the liquidity lifelines for several dependent wallet products, forcing an immediate reassessment of their fiat on-ramp strategies.

The impact of these infrastructure failures is disproportionately felt in the Chinese-speaking markets, including the Chinese mainland, Hong Kong, and the Southeast Asian Chinese-speaking market. These regions have historically exhibited the highest demand for stablecoin payments, utilizing crypto cards not merely for daily consumption but as essential tools for cross-border payments, capital flow management, and converting stablecoins to fiat currency in environments where traditional banking access is restricted or inconvenient.

Woofun AI data shows that Fiat24 is headquartered in Switzerland and integrated into the European financial system, its investor base and partner wallet dynamics reveal a deep reliance on Asian markets. Investors such as HashKey Capital, LIF, and Redpoint China Ventures, along with partner wallets like Bitget Wallet and imToken, indicate that while the regulatory framework is European, the actual transaction volume and risk exposure are heavily concentrated among Asian users, making them the primary victims of this service suspension.

Compounding the infrastructure instability, pressure is now extending to payment channels, with users on the X platform reporting that U cards can no longer be bound to or used with WeChat Pay. While WeChat Pay has not issued a public explanation, and it remains unclear if this is a unified policy adjustment, the inability to link crypto cards to major payment processors suggests that partner banks and payment channels are independently raising risk control standards, creating a multi-layered barrier for users.

Structurally, the crypto card business is far heavier than the superficial perception of 'wallet plus bank card' suggests, requiring a complex chain involving BIN sponsors, Visa or Mastercard networks, acquiring institutions, and partner banks. Each transaction triggers a series of rigorous processes including fiat currency conversion, bank clearing, anti-money laundering reviews, and KYC checks, meaning that platforms must bear significant fixed costs for global customer service, compliance teams, and international card organization fees.

The economic model of crypto cards is increasingly unsustainable for smaller players, as revenue streams are limited to card swipe fee sharing, foreign exchange conversion profits, stablecoin exchange fees, and membership service income. When transaction volumes fail to cover the high fixed costs of compliance and operations, even well-funded startups like Kulipa find that financing addresses only short-term cash flow, leaving the fundamental business model exposed to rapid erosion of profit margins.

Regulatory headwinds are accelerating this consolidation, with the implementation of the European MiCA, the promotion of the Travel Rule, and global banks strengthening source of funds reviews. Crypto asset recharge has become the highest-risk link in the payment chain, prompting platforms like Fiat24 to suspend top-up features as a primary risk control measure, thereby shifting the burden of compliance onto the most vulnerable parts of the supply chain.

Despite the exodus of infrastructure providers, market data from Paymentscan reveals that crypto card consumption has grown from less than $10 million to $725 million in July 2026, indicating that demand is consolidating rather than disappearing. RedotPay now dominates with $382 million in monthly volume, followed by EtherFi at $96.95 million and KAST at $88.21 million, while affected platforms like Ready saw a 70% drop and Wirex One increased volume 11 times, signaling a definitive shift toward leaders with robust compliance and operational stability.