The German financial and technology services giant Wirecard declared economic insolvency with a debt exceeding $4 billion, while the debit cards of several of its clients were frozen, leaving users with great uncertainty.
Recently one of the debit card issuing companies cryptocurrencies, Europe's largest bank has filed for bankruptcy after an audit revealed that 1,9 billion euros were missing from its accounts. Wirecard has now applied to the München District Court for bankruptcy, arguing that the company is unable to meet its creditor payments.
According to reported The Wall Street Journal, Wirecard declared that it is facing imminent insolvency and high debt, reasons for which it filed the declaration of economic insolvency for several of its subsidiaries. Likewise, this medium reported that Wirecard would be the first company to file an insolvency within the DAX 30, Germany's main stock market index.
It may interest you: Wirecard is under audit and 1.900 billion euros are not available in its accounts
Is Wirecard bankrupt and bankrupt?
Despite the major scandal facing the financial services company over the lack of more than a quarter of the cash it reflected in its accounts, Wirecard has declared financial insolvency due to its inability to cover debt payments to its creditors in the short term.
According to several of its businessmen, Wirecard implemented this measure in order to minimize the company's operating expenses to keep it active. And that the state of insolvency will be a measure taken until a feasible solution is found to the situation that Wirecard currently faces. In addition, its businessmen also pointed out that this measure does not mean the total bankruptcy of the company, at least not for the moment.
Despite these statements, since it was discovered that the company's balance sheet could have been falsified, Wirecard's shares on the Frankfurt Stock Exchange have fallen abysmally. During the days prior to this scandal, Wirecard shares experienced a reduction of more than 70% in value, as reported Bit2Me News previously. Now, currently, the value of these shares presents a new and deep drop with more than 60% of its value; a fact that has left Wirecard shares with a value close to 1,28 euros per share. It should be noted that before this news was known, the company's shares were around 100 euros per unit; So to date, Wirecard's capitalization loss is truly catastrophic.
For their part, the cryptographic companies that operated with this multinational implemented a security measure through which they froze the debit cards supplied by Wirecard.
Wirecard cryptocurrency debit cards suspended
Businesses Crypto.com, TenX, Wirex y Cryptopay operate Wirecard as the largest distributor of cryptocurrency debit cards to their users and customers. Now, each of these companies made separate statements about the security measure implemented to block and suspend the debit cards supplied by this multinational; The reasons, the obvious scandal that Wirecard faces both due to the lack of more than 1,9 billion euros from its annual balance sheet, and due to its recent declaration of economic insolvency.
Previously, Crypto.com CEO Kris Marszalek had been the only one to pronounce in this regard, when in an attempt to calm the situation with its users it declared that the company's funds were not at the disposal of Wirecard, but rather of another entity regulated by the Financial Conduct Authority (FCA) of the United Kingdom, alleging that users They had nothing to worry about.
FCA orders Wirecard to cease operations in the UK and Europe
Now, the FCA established a regulatory measure ordering the cessation of Wirecard operations, so Crypto.com, TenX, Wirex y Cryptopay They suspended all their activities with debit cards issued by Wirecard both in the United Kingdom and Europe. Likewise, in the statements of these companies, each one explained that the funds of their users and clients are safe and protected.
Crypto.com announced that funds equivalent to the trust balances available on these cards will be transferred to the Wallets and crypto wallets of each of the users in approximately 48 hours. For its part, Wirex y TenX They also announced that despite the situation, the funds of users who use Wirecard cards will not be affected, and that they will soon issue the processes to follow to resolve the situation.
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