Within the wake of a $2.1 billion accounting scandal, Wirecard, whose enterprise traces embody issuing cryptocurrency funds playing cards for TenX and Crypto.com, has collapsed into insolvency.
In an announcement Thursday, the Munich-based card issuer mentioned it had no selection apart from to start insolvency proceedings because it confronted “impending insolvency and over-indebtedness.”
“The Management Board has come to the conclusion that a positive going concern forecast cannot be made in the short time available. Thus, the company’s ability to continue as a going concern is not assured,” Wirecard mentioned.
Wirecard’s share price tanked almost 80% on the information.
This comes simply over per week after Wirecard, a former German blue-chip, admitted that it couldn’t account for over 1 / 4 of its stability sheet, round $2.1 billion. In a bombshell assertion, the corporate mentioned some staff may have inflated income in an try and mislead auditors.
On Monday, CEO Markus Braun was arrested on suspicion of accounting fraud and market manipulation.
Wirecard has lengthy been the first card issuer for TenX and Crypto.com. A TenX spokesperson instructed Fintech Zoom this week that buyer funds, each crypto, and fiat, had not been affected by the Wirecard scandal.
“We are however monitoring the situation closely and are always evaluating the best options for our customers,” the spokesperson mentioned.
Crypto.com has steadfastly refused to remark. “We’re still staying totally silent on this,” its spokesperson instructed Fintech Zoom.
The one public utterance has been CEO Kris Marszalek on Twitter saying consumer funds haven’t been affected by the Wirecard scandal as a result of they’re held by a separate establishment. “Wirecard does not have custody of any crypto held by Crypto.com,” he mentioned.
Neither TenX nor Crypto.com responded instantly to requests for remark after the insolvency submitting Thursday.
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