FCA orders Wirecard UK to cease all activity as the scandal moves into second week

From: RegTech Analyst

The collapse of German payment giant Wirecard has taken another turn as the UK’s Financial Conduct Authority (FCA) has ordered the FinTech’s British branch to cease all regulated activities.

The news comes after Wirecard filed for insolvency earlier this week on the back of it being unable to account for €1.9bn ($2.1bn) in its balance sheet. The company has said that the money probably does not exist. Markus Braun stepped down as CEO of Wirecard on June 19 following the news of the €1.9bn hole in its finances. Then he was arrested on Monday after having turned himself in. Braun is accused of inflating Wirecard’s finances, thus misleading investors and customers. He was later released on a €5m ($5.66m) bail.

Now the FCA has ordered the company to cease all regulated activity and to freeze all assets and funds.. The company had until this point been authorised and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards.

“Our primary objective is to protect the interests and money of consumers who use Wirecard,” the FCA stated. “Following last week’s news of €1.9bn missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm’s UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. On 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed.”

Several major UK FinTech firms rely on Wirecard services for operational support. These include the likes of Revolut, Pockit, Soldo, Anna Money and Curve.

Copyright © 2020 FinTech Global

Enjoying the stories?

Subscribe to our daily FinTech newsletter and get the latest industry news & research


The following investor(s) were tagged in this article.