FTX’s failure could be a stress test for corporate credit card startups

Last week, Ramp sent a message to crypto companies using its corporate card services saying that it is significantly lowering spending limits and mandating new requirements. Some users were temporarily suspended from spending altogether.

“In light of recent unprecedented events in the cryptocurrency, blockchain, NFT and DeFi ecosystem, we are conducting a review of all businesses operating in this space, including yours, to determine whether we reverse or modify any of the changes listed above,” one memo said.

While Ramp somewhat backtracked on the changes, its move offers a window into how corporate credit card companies could be stress-tested in the current environment. Brex, Ramp’s biggest competitor, said that there have been no changes to crypto users’ spending limits.

In Ramp’s case, companies were asked to upload their current balance sheet, including versions reflecting at least the previous 12 months; its most recently completed income statement; and a list of any cryptocurrency, blockchain, NFT and/or DeFi exchange the company has held an account with in the previous 12 months. “We sincerely regret the potential disruption to your operations, and realize this may have implications for your business,” the email said.

Less than 24 hours after that move, Ramp CEO and co-founder Eric Glyman and other executives sent emails to users on Saturday providing further context on the changes. The company wrote that the initial note “may have caused unnecessary concern” and apologized for the confusion.