- The Financial Conduct Authority (FCA) today lifted a suspension order issued against Wirecard.
- This restriction was forced by the Financial Conduct Authority in order to protect the people’s money after the German group had filed for insolvency.
- On 26th June, the United Kingdom’s financial watchdog ordered Wirecard’s UK subsidiary to stop all their regulated activities.
On 30th the Financial Conduct Authority (FCA) lifted a suspension order issued against Wirecard. Wirecard Card Solutions (WCS) is a British subsidiary of the German fintech company Wirecard. This restriction was forced by the Financial Conduct Authority in order to protect the people’s money after the German group had filed for insolvency.
Reason for Imposing The Ban
On 26th June, the United Kingdom’s financial watchdog ordered Wirecard’s UK subsidiary to stop all their regulated activities. This left many people threatened as they were unable to withdraw any money or make payments.
The truth of the suspension order was the missing €1.9 billion cash and fraud accounting. The bankruptcy proceedings were filed by the parent company in Germany. WCS had also issued cryptocurrency debit cards which were branded by Crypto.com and TenX.
WCS stated that they were working tremendously hard to take the steps which would undo the restriction and the business would recommence as usual. They asked people to stay in touch with them through their website.
Soon after these revelations, the Chief Executive Officer of Wirecard, Markus Braun, resigned and was apprehended.
Resumption of Wirecard Activities
The FCA announced that WCS had reached all the conditions which were required from them in order to lift the suspension. Following this news, Wirecard has reportedly lost about 90 percent of its value. Companies like FairFX and Pockit tried to reassure it’s customers who took to social media to express their fears.
WCS uses e-money license to operate it’s business rather than a full banking license. As a result the Financial Service Compensation Scheme does not cover the customer funds. Although, the Financial Conduct Authority does authorize and supervise the WCS in the matters of issuing e-money, providing payment services, etc.
Road Ahead For Wirecard
After receiving the suspension order from FCA, Crypto.com announced that the Visa cryptocurrency debit cards were no longer accepted in Europe. However, they have assured the customers that they will repay all the money deposited with them. it now plans to outsource the work to a new card issuing company.