Wirecard files for insolvency after $2 billion goes missing
June 25, 2020, 5:45AM EDT
1 min read
Wirecard, the troubled German payments processor, has just filed for insolvency at a Munich court.
Announcing the news on Thursday, Wirecard said it has taken the decision due to "over-indebtedness.”
The Wirecard saga began last week when the company’s auditor EY said it is unable to find evidence for $2.1 billion worth of cash on Wirecard’s accounts. Wirecard at the time said “spurious” balances may have been provided by a third party “in order to deceive the auditor.”
Wirecard later acknowledged the issue, and soon after, its CEO Markus Braun resigned. He was then arrested and later got released on bail.
The company today said it is evaluating whether insolvency applications have to be filed for its subsidiaries. Wirecard’s two subsidiaries, Wirecard Card Solutions and Wirecard Singapore, issue crypto Visa debit cards for firms such as Crypto.com and TenX. Both the crypto firms have told The Block that their operations remain unaffected for now.
Commenting on the insolvency news, Crypto.com CEO Kris Marszalek said customers' fiat funds are "safe and guaranteed by Crypto.com" and in case if Wirecard's services are disrupted, "you will receive a fast 100% credit back to your crypto wallet."
"It is not clear at this stage which of the subsidiaries are going to be affected and if any of the services will be interrupted at all. We will keep everyone up to date as this develops, but I want to make it clear for all our SG and EU card customers that their funds are safe," Marszalek added.
The Frankfurt Stock Exchange suspended shares of Wirecard before the insolvency news. The shares have lost more than 90% of their value and are currently worth only about 10 euros (~$11) apiece.