U.K. Regulator Suspends Wirecard’s Card Issuer
- The FCA started working with Wirecard’s subsidiary immediately after it became known it was missing $2.1 billion.
- As a result of the action, Crypto.com is now about to terminate its card operations in the EU and UK.
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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.
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.
- The U.K. Financial Conduct Authority continues its crackdown on crypto ATMs in the country, and has disrupted a total of 26 machines since the start of the year.
- The regulator warned the public back in March 2022 that all crypto ATMs in the country were operating illegally, and issued a “shut down or face further action” order.
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- Crypto.com has once again expanded its regulatory achievements with the acquisition of a major payment institution license for digital payment token services in Singapore.
- The license, for which the company received an in-principle approval last June, enables the exchange to provide a greater range of payment services in Singapore.
- Unnamed sourced told the Financial Times that the U.K. Treasury was preparing new rules that would give the FCA broader powers over the crypto market.
- The regulations will allow the FCA to monitor and limit operations and advertising of crypto companies, as well as restrict crypto sales in the U.K. from foreign companies.