Regulatory Pressures and Market Volatility Drive Dupay's Exit as Crypto Industry Pivots

Crypto payment card provider Dupay, which aimed to bridge traditional finance and blockchain ecosystems, has announced it will cease operations, citing regulatory pressures and market volatility as key challenges. The decision comes amid a broader shift in the crypto industry, where firms are grappling with tightening oversight and fluctuating demand for digital-asset-linked services, according to a Lookonchain report.

The company's exit mirrors recent regulatory developments in Canada, where the government unveiled a $10 million initiative to regulate fiat-backed stablecoins under its 2025 federal budget, a development first outlined in the same Lookonchain report. The new rules mandate that stablecoin issuers maintain sufficient reserves, implement robust risk management frameworks, and ensure transparent redemption policies, according to a LiveBitcoinNews report. While these measures aim to enhance consumer protection and financial stability, they also raise compliance costs for smaller players, potentially accelerating consolidation in the sector, as noted by a Coinotag report.

Market volatility has further strained crypto firms. In recent weeks, the JELLYJELLY token—a meme coin linked to a social media app—surged 224% in a single day, triggering $13 million in short-position liquidations and sparking accusations of whale manipulation, according to an ODaily report. Such events highlight the risks of high-leverage trading and speculative behavior, which can destabilize platforms relying on user confidence. Aster, a decentralized exchange, launched JELLYJELLY contracts with up to 5x leverage days before the price spike, an action flagged in a separate ODaily article, drawing scrutiny over its role in enabling volatile trading environments in Gate coverage.

The U.S. government shutdown, which has disrupted social safety nets like SNAP benefits, also underscores macroeconomic uncertainties affecting crypto adoption, as reported by an NBC News report. With over 40 million Americans relying on federal assistance, reduced disposable income may dampen demand for alternative payment methods, including crypto-linked cards, the NBC News piece notes. Meanwhile, political divisions over funding priorities have left policymakers with limited bandwidth to address emerging crypto risks, The Guardian reported.

Dupay's closure reflects a broader trend of crypto firms pivoting or exiting as regulatory clarity lags behind innovation. Canada's stablecoin framework, while aligned with U.S. efforts to stabilize digital payments, signals a global push to rein in unregulated experiments, according to a Yahoo Finance report. For now, the industry remains in flux, with compliance burdens and market turbulence reshaping the landscape for providers aiming to merge crypto and conventional finance, as discussed in a Coinotag analysis.