Circle Ceases Processing ACH Payments: Dapper Labs

Dapper Labs has stated payment partner Circle has stopped processing Automated Clearing House (ACH) payments.

Per Dapper, Circle has, “effective immediately,” decided to “stop processing ACH payments” for its partner companies in entirety. ACH payments essentially are electronic funds transfer (EFT) meant to move money across US bank accounts.

Per Chinese reporter Colin Wu, Dapper shared the said announcement on its public Discord server. Colin Wu tweeted:

In an announcement on its public Discord server, Dapper said Circle has made the decision to stop processing ACH payments for all of its partner companies, “effective immediately.” ACH payments are a type of electronic funds transfer (EFT) that allows money to be moved from one…
— Wu Blockchain (@WuBlockchain) March 7, 2023

Dapper reportedly said, We work with a payments partner, Circle, to manage certain transactions,” Dapper said. “As a result, the ACH payment method is currently unavailable.

Being the primary (dollar-pegged stablecoin) USD Coin-issuer, Circle is the second-largest stablecoin following tether. Already under-processing ACH payments are being monitored, per Dapper states. Dapper is also coordinating with its payment partners to solve the problems “as quickly as possible.”

Dapper is reportedly trying to partner with a new partner for ACH payments whilst also turning on direct withdrawals to debit and credit cards.

Famed with such stellar NFT projects as NBA Top Shot and CryptoKitties, on Sunday Dapper said it was stopping the payments “temporarily” as it investigates the issue faced by its third-party partners.

Users can reportedly still withdraw USD via wire transfer and USDC (on Ethereum and Flow blockchain networks). As for buying NFTs, it is still possible to buy NFTs via cryptocurrencies, credit or debit cards, per Dapper.

As for related Dapper Labs news, it’s reportedly facing a class-action lawsuit overseen by the U.S. District Court Judge Victor Marrero (Southern District of New York).

In the said lawsuit, plaintiffs allege that Dapper Labs’ NBA Top Shot Moments NFTs are securities, requiring a registration with the U.S. Securities and Exchange Commission (SEC), failing which violates the U.S. federal securities laws.

Dapper Labs’ NFT collection is reportedly qualifying to be assessed under the Howey test to determine if its transactions can be termed as “investment contracts.”