SpankChain Shuts SpankPay – Blames Negative Banking Scenario for Crypto Payment Processor’s Closure
SpankPay, a crypto payment processor that has been operating under the umbrella of Ethereum-based adult entertainment platform SpankChain, has stopped operating. The closure was the result of the platform’s service provider Wyre terminating its agreement to provide payment services to SpankPay. In a statement released on March 20, 2023, SpankPay announced that it has decided to shut down operations “after a long and difficult consideration.” The platform also assured its users that their money is safe and that it will be returned to them as soon as possible.
The reason behind the termination of the agreement is allegedly due to “violations of any third-party payment processor or network rules.” However, SpankPay claimed that it was a targeted shutdown by Wyre, as its new payment processor, Checkout dot com, does not work with adult businesses. The Ethereum-based blockchain SpankChain, which aims to help content creators in the adult industry to remove intermediaries such as banks from the process, has been operating SpankPay in a hostile banking environment.
Operating in such an antagonistic environment has always been a challenge for SpankPay. However, escalating attacks from service providers who reject business due to being in the adult industry, have become untenable for the platform’s small team and the niche market they serve.
SpankPay was launched in July 2019 by SpankChain to assist adult entertainers and merchants in accepting cryptocurrency for their services. For security and privacy reasons, people associated with the adult entertainment industry prefer the anonymity that crypto transactions provide. Many financial institutions still view the industry through a negative lens and are reluctant to associate with it.
Despite the closure of SpankPay, SpankChain remains optimistic about the future. They have assured their users that their money is safe and promised that they will get it back as quickly as possible. The company continues to develop and invest in products and services to advance the adult industry.
The banking crisis that has engulfed the crypto industry over the past few years began with the collapse of crypto-focused banks such as Silvergate Bank, Silicon Valley Bank and Signature Bank. These collapses have created a banking crisis, spreading panic worldwide about an impending global financial crisis. Traditional banks were supposed to be working as a bridge between Centralized Finance (CeFi) and Decentralized Finance (DeFi), but recent collapses almost broke this bridge. Due to increasing interest rates and other factors, banks struggle to survive.
The crypto industry has also been hit hard. For example, USDC, the stablecoin, lost its peg when its issuer Circle was found to have a $3.3 billion cash reserve in Silicon Valley Bank. Many crypto entities are now looking for banking partners, and the already limited list has grown even thinner after big players left the arena.
Silvergate and Signature have been a structural part of the digital asset industry for several years, offering services to traditional finance, as well as a speedy payment network for the crypto industry. The failure of these banks has had a significant impact on the industry, highlighting the need for stable and reliable banking partners.
The adult entertainment industry also requires such stable and reliable banking partners as it moves towards cryptocurrency payments. Hopefully, as the crypto industry matures, more banking institutions will embrace the technology and offer their services to this growing sector. Until then, companies such as SpankChain will have to navigate the hostile environment and hope for the best.
In conclusion, the closure of SpankPay is a clear example of the banking crisis affecting the cryptocurrency industry. For the adult entertainment industry, this has been particularly challenging, as traditional banks are often unwilling to provide their services. The closure of SpankPay is a significant blow to the industry, but SpankChain is optimistic about the future and continues to invest in its products and services.
