Jun 30, 2020
Following the German payment provider, Wirecard’s accounting scandal, thousands of British users’ accounts have been blocked leaving many in financial distress. This happened last week when Britain’s Financial Conduct Authority (FCA) issued restrictions against Wirecard’s services.
The FCA stated that it cannot lift restrictions until Wirecard can reassure them that client money is safe. This has led many customers to face difficulties since they were unable to withdraw money over the weekend. On Saturday, Wirecard released a statement that it would proceed with business activities after filing for insolvency.
Several British fintech companies, including the online banking system Pockit, had to suspend services due to the FCA’s restrictions on Wirecard, which left the more vulnerable Britons without access to their money. The reason behind Wirecard’s scandal is based on allegations of accounting malpractices that lead to the revelation that an astonishing €1.9 billion was missing.
— Online Financial Reviews (@OnlineFinancia7) June 23, 2020
Wirecard’s CEO of 18 years, Marcus Braun, was arrested on suspicion of fraud and manipulation. The group subsequently filed for insolvency and became the first company listed on the DAX 30 index to do so. The fraud was discovered by the group’s auditor, Ernst & Young who declared that as many as 50% of transactions Wirecard claimed they processed, never actually happened.
On June 29th, 2020, the FCA announced that it is now in the “position to allow Wirecard to resume operational activity,” and that “customers will now, or very shortly, be able to use their cards as usual.”