Mara, supported by Coinbase, suspends wallet service due to regulatory concerns starting in 2023
Mara Wallet, a multicurrency wallet by Mara, the crypto startup that raised $23 million from investors like Coinbase and FTX, has been inaccessible since November 2023. The company told users to move their deposits to traditional bank accounts pending the completion of the upgrade but did not specify a timeline.
Mara, which claims to have 4 million users, said it paused the wallet to comply with new regulations in the UK.
“We’re changing our regulatory backend to align with our new EU regulatory compliant partner in response to changes in UK policy,” Nnandi said in an email to TechCabal.
Nnandi shared a link to an article about the UK regulation that triggered the pause of the wallet service. That article contained a link to a list of companies the FCA says may be “providing or promoting financial services or products in the UK without our permission.” The list does not include Mara or any of its known service providers.
Mara did not specify how its marketing was no longer compliant with the country’s new regulations. The wallet service, which allows users to buy, send, sell, and withdraw crypto assets and fiat, was primarily marketed to Nigerian and Kenyan users.
It used a referral system that rewarded users (Mara Champions) with “Mara tokens.” Champions earned tokens for downloading the wallet and referring others.
Per the company, one Mara token is equivalent to $1, and some of Mara’s champions referred as many as 200 users to the crypto wallet service. But many of those users say they have never been able to withdraw these tokens.
In November 2023, when Mara asked users to withdraw their deposits from the wallet, users were unable to withdraw their referral earnings, even though the app displayed the funds in the wallet. Some users who have been waiting for nearly a year to withdraw their referral earnings have expressed worry that their marketing efforts have been in vain.
“All referral bonuses accumulated will be available once the Mara Exchange is launched,” Nnandi, Mara’s CEO, said. The company is also working on a separate pro-exchange for sophisticated traders.
Mara was founded in 2021 by Chi Nnadi, Dearg OBartuin, Kate Kallot, and Lucas Llinás, former Nvidia, Founders Bank, and Rappi executives. The startup raised a seed round of $23 million in equity and token sales from over 100 investors, including Coinbase Ventures, Alameda Research (FTX), and Distributed Global, in 2022.
Since 2022, two co-founders, Kallot and Llinás, have left the company. Kallot, who has gone on to raise funding for her climate-tech start-up, Amini, did not respond to requests for comments.
In 2023, the startup also laid off its marketing team and nearly everyone at its nonprofit arm. After the layoffs, Mara Foundation also shut down Mara Academy, a crypto education platform, that it launched in partnership with Circle, the issuer of the popular stablecoin USDC.
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