The neobank and crypto card services market is experiencing a deep crisis. This is not at all due to a drop in demand — on the contrary, over the past week, the volume of top-ups for such cards reached a record $245 million. The problem lies in the "under-the-hood" architecture: the vast majority of projects are doomed to close within the next 18 months, and the main reason is negligent compliance practices.
A compliance infrastructure expert, known under the pseudonym Criptolawyer, conducted an in-depth market analysis and identified the key layers on which the business relies. A failure in any one of them can instantly collapse the entire structure. Demand, as he emphasizes, is the last thing to worry about.
Cards and Ramps: A Zone of High Compliance Risk
A card program involves a three-way relationship between the service, the issuer, and the payment network. If even one party loses trust in the system, cards stop working not gradually, but instantly. As a striking example, Criptolawyer cites Binance, which lost Visa in Europe in July 2023, and two months later, Mastercard in Latin America. Another case is the Ready service, which in June 2026 gave users outside the EEA just one hour to react after severing ties with the issuer.
Payment networks require continuous, not periodic, screening against sanctions lists at the individual account level. A transaction monitoring system with real-time alerts and a unified KYC level across all jurisdictions is necessary. The cost of a mistake is colossal: the £29 million fine for Starling Bank, whose system failed to generate a single individual sanctions alert for six months, is proof of that.
The expert paid special attention to the on/off ramp layer. Each such step is primarily a compliance event, and only secondarily a matter of convenience. When depositing, the source of funds and identity are checked, and when withdrawing, a clean audit trail with a documented source of funds is critically important. It is on the withdrawal process that teams most often cut corners, assuming users won't notice. Regulators, however, see everything. During a quarterly review, a banking partner takes a sample of transactions, and if "the trail isn't clean for every transaction," the company finds out at the worst possible moment.
Yield Products and Compliance: The Foundation, Not an Add-on
Criptolawyer identified yield products (earn) as the most underestimated layer. Shared vaults are perceived as a product solution, but in essence, they are a legal solution. Commingling user funds in a single pool creates fiduciary risks and complicates the situation in the event of bankruptcy. The "killer question" for such a structure is simple: show the ledger entry for a specific user's balance. If the answer requires reconstruction from the pool's accounting, there is essentially no answer.
The best practice is to isolate each user's account from day one: a separate ledger entry and individually calculated yield. Only such a structure can withstand scrutiny from a banking partner, regulator, or institutional investor. In Europe, incidentally, Article 50 of the MiCA regulation prohibits paying interest on euro-denominated stablecoins, so the legal path lies through tokenized government bonds and "RWA wrappers."
The foundation of the entire structure is the screening layer. Most teams build it reactively — when something breaks or a regulator asks a question. This is fundamentally the wrong approach. Those who survive build compliance proactively: before the card, before the ramp, and before the yield product, with a single end-to-end audit trail. Disparate point solutions create gaps: the KYC system doesn't communicate with transaction monitoring, which in turn doesn't pass data to sanctions screening. Each such gap turns into a reconciliation problem at the most inopportune moment.
My analysis: The crypto card and neobank market is overheated. The $245 million in top-ups is not a story about cards or yield, but a story about survival. The same lessons were taught in different years by WaveCrest, Wirecard, FTX, Binance, and Ready: compliance is not the last thing you build, but the only thing that allows you to build everything else. Projects that still perceive compliance as a burden rather than a foundation are doomed to repeat the fate of their predecessors.