Markus Braun, former CEO of financial services company Wirecard
Markus Braun, former CEO of financial services company Wirecard, attends the earnings press conference in Munich, Germany, April 25, 2019. AP

The U.K.’s Financial Conduct Authority (FCA) has suspended Wirecard’s subsidiary that is responsible for issuing debit cards, the financial regulator said in a statement on 26 June.

According to the notice, Wirecard Card Solutions has been ordered to cease all of its regulated activities, not dispose of any of its funds, and to communicate on its website and to its customers that it is no longer allowed to conduct regulated activity. The FCA has said that it stepped in in order to protect the customers’ funds, and to prevent the company from accepting or disposing of any revenue.

Earlier this month, it became known that Wirecard was missing around $2.1 billion from its accounts. The FCA immediately started working with the card issuing subsidiary, in order to ensure the safety of its customers’ funds, and then on Friday, took “additional measures” to stop the firm from conducting regulated activities. The FCA’s decision has affected all cards issued by Wirecard’s subsidiary, including the ones belonging to Crypto.com and TenX.

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Though it is still unknown what will happen from now on, one of the possibilities is that customers get barred from using their debit cards issued by the company. Kris Marszalek, the CEO of Crypto.com, was quick to reassure his customers that their funds were safe, as they were being held by a separate financial institution.

A day before the FCA’s action, he tweeted:

On Friday, Crypto.com also released a statement, in which they said it was asked to terminate operations for its E.U. and U.K. cards, and that its customers will be unable to use their cards “later today”. The company further promised that all funds on the debit cards will be returned to their customers, and that they can expect the refund on their crypto wallets.

The CEO of Wirecard resigned from his position earlier this month, and was later arrested by German authorities, who speculate that the company’s management was running a fraud to misrepresent the firm’s earnings and assets. Days later, the firm filed for insolvency due to the missing funds, which is usually the first step to bankruptcy.

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