Crypto debit cards leave brands exposed to failures upstream

Crypto debit card failures have exposed how little control some wallet and fintech brands hold over their payment services, with a $1.1 million Rain contract exploit illustrating the risks of shared infrastructure. Summary Shared banks, processors, and middleware can leave separate card brands exposed to the same failure. Rain’s August exploit targeted funded card balances, leaving customers’ personal wallets and private keys untouched. MNEE App CEO Ron Tarter recommends direct bank relationships and independently accessible customer records. US deposit insurance covers eligible bank deposits against bank failure, not a fintech provider’s collapse. Ron Tarter, co-founder and CEO of MNEE App, told crypto.news that companies relying heavily on banking-as-a-service platforms may control little beyond their app, card design and marketing. A sponsor bank provides the banking permissions and holds fiat deposits, while a processor authorizes transactions. Identity checks, compliance, fraud prevention and crypto wallet services can sit with separate vendors, he explained. “You can have millions of users and a strong brand and still not hold the final authority over your own product.” Crypt...