The card issuer for the most prominent crypto-cards such as Crypto.com, Wirex and TenX has filed for insolvency.
Wirecard, a German blue-chip, announced earlier this month that they couldn’t account for approximately a quarter of their balance sheet; 1.9 Billion Euros. According to that statement, it is said that there are certain indications that their trustee may have purposefully inflated the numbers to deceive the auditors.
The breaking news of this scandal sent the company’s stock price plummeting from over $100 to just a few dollars within a few short days. The day of the announcement alone, the stock dropped by over 60%.
Following the first statement, Wirecard came out with a second one stating that they are filing for insolvency. The company communicated: “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.”
Affect on Crypto-Cards
Following this news, there were many concerns about the future of some crypto-cards that are issued by Wirecard. According to the CEO of Crypto.com, Kris Marszalek: “Debit cards issued by Wirecard for Crypto.com are fully prefunded. These client fiat funds are held by an EMI institution regulated by UK FCA in segregated client accounts. The funds are held at another bank (not Wirecard) as required by the FCA.”
Although the issuance of new physical cards may become problematic in the near term, the funds held by customers should not be affected according to this previous statement.