UK regulator has suspended Wirecard’s subsidiary that issues debit cards in the country. The Financial Conduct Authority or FCA of the United Kingdom has issued several restrictions on the Wirecard subsidiary.
According to the UK regulator, Wirecard can no longer dispose of any funds, conduct any regulated activity, and have to inform its customers that it has no longer the authority to conduct any regulated activity.
To which the official website of Wirecard has not updated and there is no information regarding this decision of the FCA. The statement was first updated on the official FCA website on June 26. Other important information is also provided on the UK regulatory website.
The Wirecard Scandal
The German fintech, Wirecard is responsible for many crypto debit cards and the majority of the companies were relying on the company including Crypto.com. The scandal began when the company could not provide information on how 32% of its assets have eloped.
The CEO of the company, Markus Braun resigned and was arrested by the German police immediately. According to a report, Wirecard staff is doing this fraud for more than a decade. The similar was reported in Dubai and Dublin several times in the past as well.
It was a fraud materialized by the management of the company in the long run. Few days before FCA caught the company for doing this fraud, it also filed for insolvency. They reported the shortfall and it was a sign of bankruptcy.
Why Wirecard Has Been Suspended By Financial Conduct Authority?
Once considered a major fintech company Wirecard was reportedly appeared as a defaulter when a fraud of $2.1 billion was caught. Some of the employees of the company misrepresented a huge sum of money and that’s when the reputation of the company came at stake.
The company’s auditor was deceived by one of the trustees. He tried to falsely show the balance from the official bank account of Wirecard. It immediately affected the stock price of the company by 50%.
How FCA Is Protecting The Customers During The Time Of Despair?
FCA has taken some of the bold steps to protect multiple customers that were using Wirecard services. FCA has started working with Wirecard subsidiary to protect customer’s funds. The regulator has already stopped all the regulated services conducted by the company and planning to impose many other strict actions.
What Will Happen To The Customer Debit Cards Issued By Wirecard?
In clear words, the money that was being circulated through the Wirecard subsidiary is now blocked. No one can access it as of now. Customers can no longer use debit cards issued by the company. These cards also include cards from TenX, Crypto.com, Wirex, and CryptoPay.
However, Crypto.com has confirmed that the funds of its customers are safe and the company owns them. The Crpto.com cards are working normally but if the issue persists, the funds will be transferred to the customer crypto wallets, said the CEO of Crypto.com
The company is also looking for alternate ways to protect its customers. It is also finding other ways so that customers can keep on using their debit cards as they normally do.
Crypto.com was asked to cease its U.K. and EU cards that means customers can no longer use their cards. However, Crypto.com soon initiated online settlements to transfer the funds from debit cards into the crypto wallets. There is no update from other crypto card companies till now.
FCA Guidelines After Wirecard Suspension
FCA has created a specialized customer care service for Wirecard customers. Everyone will shortly be able to use the card again. If you had a benefit payment account, the FCA is working with the Department of Work and Pensions to quickly disburse benefits into such accounts.
Your money will still be safe because Wirecard practices safeguarding measures. FCA will try to take every possible step to recover such customer’s money who had crypto debit cards issued by Wirecard.