Wirecard: Crypto Card Users' Funds Locked as UK Regulator Suspends Subsidiary
UK Financial Conduct Authority (FCA) on Friday suspended the license of Wirecard Card Solutions (WCS), a unit of troubled Wirecard AG, which is responsible for issuing Visa cryptocurrency debit cards.
It means some users of cards such as Crypto.com’s Mco visa debit card and Tenx’s visa debit card may not be able to access their funds for a time. Both the crypto-enabled cards are issued by the Newcastle-based WCS.
FCA said Wirecard Card Solutions “is no longer permitted to conduct any regulated activities” and “must not dispose of any assets or funds.” The regulator indicated that the decision was taken “in order to further protect customer money”.
“There are ongoing events in Germany concerning companies closely linked to Wirecard. Wirecard’s parent company, Wirecard AG based in Germany is currently the subject of law enforcement interest and insolvency proceedings,” said the FCA.
Cryptocurrency card operators Crypto.com and Tenx told customers that their funds were safe. Kris Marszalek, chief executive officer of Crypto.com, stated that the FCA had “effectively shut down Wirecard UK” and that European card users will no longer be able to use their cards.
“Our EU/UK cards will stop working today. All customers will receive 100% credit back to their crypto wallets within 48 hours,” Marszalek said.
“Separately, we’re working on transferring the card program to a new provider, so that we can resume the issuing of cards in the UK and Europe and allow existing and new customers to benefit from our card program again,” he added.
Tenx tweeted that ” [we] would like to make clear that all of our customer’s crypto and fiat balances are maintained by Tenx and not Wirecard…this issue has no impact on our operation.”
Wirecard Card Solutions said on its website that it “has temporarily suspended its electronic money issuing, card issuing and acquiring a business with immediate effect and until further notice.”
The company added that it is working to have the license restored by the FCA. Wirecard AG has faced a tumultuous week since it reported missing $2 billion from its accounts on June 18 and later admitting the cash did not exist at all.
Now, the German payments processor has filed for insolvency in the face of debts totaling nearly $4 billion. Its long-time CEO Markus Braun quit on June 19 before he was arrested only three days later on allegations of manipulating financial records. He’s out on $5.6 million bail.
Shares of Wirecard have since been suspended from the Frankfurt Stock Exchange after losing more than 90% in a matter of days.
What do you think about the impact of Wirecard’s collapse on the issuance of crypto debit cards?
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