How a Paris-based startup with insufficient capital shit down and temporarily took down payment processing for several other clients, and showed the benefits of self-custody wallets, early requirements for large capital and infrastructure behind how it avoided licensing hell, and how it cost it.

On 29th July, 2026 Paris based Stablecoins card issuance infrastructure startup, Kulipa had collapsed leaving over 120,000 cards unusable, and their clients like Ready, Solflare, Flutterwave and nSave scrambling to find new providers.

Kulipa’s Collaps And Aftermath

Kulipa — a Paris based issuer infrastructure platform, established in 2023 by co-founder Axel Cateland, with the stated goal to provide infrastructure to issue white label enterprise cards to stablecoin wallets providers and fintech giants.

The Block had reported that Kulipa had raised a seed round of $6.2 million co-led by Flourish Ventures and 1kx, and later with White Star Capitals and Fabric Ventures later participating bringing the total to $9.2 million in total funding, with the goal of providing card infrastructure like debit and credit cards for crypto and Stablecoins for wallet providers like Solflare and Ready, and payment processors and savings platforms like Flutterwave and nSave. And already had signed with 20 different wallet providers and fintech companies.

And on July 29th this year, the Company collapsed due to solvency issues and had to shut down their services abruptly. No warning, no email, no grace periods, their cards just refused to work one day when customers tried to use them. Leaving over 120,000 individuals unable to transact with their newly acquired cards.

Vidor Gencel, Solflare’s co-founder and co-CEO, said on X that it was "a lousy way to find out.". But assured the public that their money was left untouched, as Solflare funds were self-custody end to end, meaning no deposits, top-ups or money parked in Kulipa. And soon after that had promised to find another partner with higher limits, higher cashback and Google Pay and Apple Pay support.

Meanwhile Ready which had already absorbed one incident a month prior, and its customers similarly stranded. And its co-founder had this to say on X.

While Ready had started issuing apologies and gave out refunds to those who bought these cards.

The Architecture That Saved The Money

Despite the Company going bankrupt, their customers money was left untouched thanks to this smart financial architecture.

Instead of the money being pre-funded or kept in the company’s vaults. Many of Kulipa’s. clients, such as Ready and Solflare, kept their funds in the users self-custody wallets, and withdrew funds when they needed to be spent directly from the wallet.

Though others like nSave and Flutterwave had a different model of Pre-Funded wallets. And while some of the money was lost, nSave realized the situation and made a deal to delay the shutdown by 5 days and allowed their users to move their funds to a new card or spend them. Preventing customers from becoming creditors to bankrupt estates.

Warning Signs Before The Fall

The prior month of June 16th, Ready had to issue a hurried one hour notice to its users outside of the European Economic Area (EEA) to let them know that they will be unable to use their cards, due to their card provider Kulipa having made changes.

While user funds were similarly safe, the rails that turned crypto and Stablecoins like USDC and USDT into usable economic tinder that merchants could accept was cutoff.

So the narrative that the self-custody saved everyone narrative, while true is overlooking the bigger picture that while your funds might still remain safe in your wallet, your ability to use them might one day be cut off, from one single mistake made by a vendor, on which so many fintech and crypto startups are built on without your knowledge.

A Deeper Look Into The Collaps

To just simply move and see this as a reckless underestimation of the adequate capital needed to operate a fintech startup, or over-spending would be a misunderstanding as it is much deeper and complicated than that.

Despite looking like any Fintech startup, having raised over $9.2 million dollars and having already signed 20 contracts with Fintech and wallet providers across the EU, Argentina and Nigeria, Kulipa is not a traditional card issuer, and did not have most of its regulatory and compliance infrastructure.

Kulipa’s Rellience On Third Party License

Due to the strict licensing regime, and the time and capital needed to get a banking licence, Kulipa’s CEO Axel Cateland made a decision to instead partner with a BIN Sponsor. And rent a license instead. Allowing them to scale fast and sign contracts with multiple customers in this competitive market.

A BIN, or Bank Identification Number is the first four to six digits of the number in a bank card, that is issued by payment schemes like VISA and Mastercard only to their principal members like licensed banks and issuers.

However this process is capital extensive, messy, especially for a small startup, and requires a lot of time and in such a competitive market, getting a BIN sponsor can help speed up the process. BIN sponsors are companies or platforms that already are members of Mastercard and or VISA, and lend their license and compliance team to handle financial rails and most of the compliance overhead. While allowing for rapid scalability and obtaining a card issuance scheme in months instead of years of extensive paperwork.

Kulipa’s original BIN sponsor was Monavate, a Lithuanian based BIN infrastructure company, which had sponsored Kulipa back in 2025, and had issued their BIN for Kulipa to use.

While this wouldn’t be a problem for any normal startup, the problem with Kulipa was that it was a small heavily undercapitalized startup that was relying on the hope that the next round of seeding kept on paying the next round of fees for their BIN sponsor and the physical card manufacturers.

This meant that Kulipa was a middle-man reliant on middle-man, and the fees and demand for small charges if any when using crypto cards meant their margins were already thin

And to add to the flame, on June 16th, Manovate was shut down by the Bank of Lithuania, after it had conducted what was essentially a pattern of crackdowns on Crypto and fintech companies, who prioritized growth over compliance, leading to various fintech companies having their license revoked or shutdown completely. One of them was Monaveta. The company that sponsored Kulipa for the BIN.

This pushed Kulipa to find another BIN sponsor rapidly and they eventually found another and while their new sponsor was never named, they only happened to support under the European Union jurisdiction, leading to Kulipa’s customers clients outside of the EU looseing access. Hence the June 16th incident.

Combined with the fact that the company was heavily undercapitalized, was running on thin margins and was paying fees on their sponsor and card manufacturers, it meant they had very little left to absorb the shock. This was both the warning sign and the time it took on the first shock.

Conclusion 

This is a conclusive look at both the failure of an undercapitalized startup to follow compliance laws, and a failure on the industries part on building the infrastructure on few vendors like Kulipa, without knowing their financial situation or potential middle-man.

But also at the architecture that had potentially saved thousands of card holders from a bigger disaster, and how as the industry matures and smooths out, more Kulipa’s with form, hopefully this time with more guard rails and safety built in.