Crypto coin cards affected by UK regulator’s suspension of Wirecard’s subsidiary
The Wirecard subsidiary responsible for issuing debit cards, Wirecard Card Solutions Ltd., has been suspended by the UK’s Financial Conduct Authority, or FCA.
According to a statement issued on June 26 by the regulator, Wirecard’s subsidiary is required not to dispose of any of its funds, to cease carrying out its regulated activities and to communicate on its website and to its customers that it is no longer permitted to carry out regulated activities.
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However, as of this writing, these statements are not present on any of Wirecard’s websites, including the subsidiary’s dedicated domain.
The FCA explained that following news of Wirecard’s EUR 1.9 billion deficit, it began working with the card issuing subsidiary to ensure protection of customer funds. On Friday, the regulator took „additional measures“ and forced the company to stop all regulated activities. „This now means that customer money cannot be accessed,“ the statement concluded.
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This suggests that customers may be prohibited from using any of the debit cards issued by the company. This includes Crypto.com, TenX, and other crypto currency debit cards.
Crypto.com CEO Kris Marszalek assured his customers that the funds are safe and owned by the company. Speaking to Cointelegraph, Marszalek added:
„Right now the cards are working fine. According to our statement yesterday, in the event of a disruption, we will quickly proceed to credit the funds back into our users‘ cryptpto wallets. Given the announcement made by the FCA today, this is very likely.
He added that the company is looking for alternative solutions to ensure that customers can continue to use their cards.
In a subsequent update to Crypto.com, the company said it was asked to cease operations on its EU and UK cards, which means that customers will not be able to use them „after“. The company promised that within 48 hours all funds from the debit cards would be returned to customers in their cryptpto wallets.
Cointelegraph also contacted TenX, but did not receive an immediate response.
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The developing scandal
Wirecard’s problems began when the company admitted it lacked more than 32% of its claimed assets, valued at $2.1 billion.
CEO Markus Braun resigned, and German authorities subsequently arrested them. Prosecutors believe that the company’s management was involved in a long-term fraud to misrepresent the company’s profits and assets.
On Thursday, the company declared itself insolvent due to the sudden deficit, which may be the first step towards bankruptcy. The disruption of its business by the Bitcoin Lifestyle is likely to worsen its already tenuous financial situation.