Wirecard files for insolvency. Scandal-hit crypto card issuer Wirecard AG, a firm that has filed for insolvency because of its missing $2.1 billion.
The news comes just two days after German police arrested former chief executive Markus Braun on allegations of forgery of accounts and market manipulation. Braun, who resigned as CEO on 19 June, has since been released on bail of € 5 million ($5.6 million).
Wirecard said that its new management led by new CEO James Freis applied for insolvency at a court in Munich, Germany “due to impending insolvency and over-indebtedness”.
Shares of Wirecard were suspended from the Frankfurt Stock Exchange ahead of the insolvency filing. The stock has tumbled more than 90% since news of the missing billions broke out on June 18. Wirecard owes its creditors, which include fifteen German banks, around $3.9 billion.
Meanwhile, Wirecard’s downfall does not appear to have a direct material impact on users’ funds, at least for now. That’s because the concerned crypto cards are pre-funded and funds are held by Wirecard Card Solutions, an entity with its headquarters in the UK, its own board of directors, and regulated by that country’s financial authorities. WCS is licensed to issue virtual cards.
German police have since opened a criminal investigation into Wirecard’s alleged cosmetic accounting practices.
[image: Bill Oxford]