The CEO of Crypto.com, a Wirecard Card Solutions card issuer, vowed to issue refunds to its customers hours after the United Kingdom’s financial regulator froze German payment processor Wirecard’s cash and assets.
The Hong Kong-based payments and cryptocurrency platform said it is refunding 100 percent of customer funds after the Financial Conduct Authority (FCA) suspended Wirecard’s operations. Wirecard filed for insolvency Thursday after independent auditors could not account for $2.1 billion Wirecard said was deposited in two banks in the Philippines.
“We’ve been working on alternative solutions with our partners to make sure our customers can continue their cards, and will provide an update on this in due course,” Marszalek told the online news outlet.
All funds will be refunded in the next 48 hours.
TenX, the London-based cryptocurrency payment platform, is also a Wirecard issuer. TenX did not return a call for comment from CoinDesk.com.
CoinDesk reported both companies have assured customers their funds were safe because and being held by a separate financial institution.
But spokespersons declined to say whether they were seeking another card issuer.
On Friday (June 26) the FCA ordered Britain’s Wirecard subsidiary to freeze the German company’s funds as regulators determine the next steps. The move barred customer access to their accounts.
“We took additional measures to require the firm to cease all regulated activities in order to further protect customer money,” the FCA said in a statement. “This now means customer money cannot be accessed. Our primary objective is to protect the interests and money of consumers who use Wirecard.”
Ernst & Young (EY), the auditing team hired by Wirecard, is facing questions after sources said the global accounting firm failed to verify Wirecard’s financials. Specifically, EY reportedly failed to request crucial information from a Singapore bank where the German payment processor claimed it had up to 1 billion euros ($1.1 billion) in cash, the Financial Times reported.
“The big question for me is what on earth did EY do when they signed off the accounts?” a senior banker at a lender with credit exposure to Wirecard said.
Wirecard Card Solutions said it is taking steps to lift the suspension so business can resume as usual.
“We will provide further updates on our website as soon as we can,” a company spokesperson said.