The UK financial watchdog – the Financial Conduct Authority (FCA) – today announced that it had suspended troubled payment processor Wirecard’s subsidiary, Wirecard Card Solutions (WCS), which was responsible for issuing Visa crypto debit cards.
Consumer Protection the Top Priority
The spectacular fall of the German payment processing firm Wirecard has sent shock-waves across Europe. On June 25, Wirecard collapsed owing creditors some $4 billion after disclosing a huge deficit in its books which, according to auditor EY, was the result of a sophisticated global fraud.
The magnitude of the failure of Wirecard can be estimated from the fact that the European Commission has launched an independent analysis to determine the “adequacy” of German financial watchdog BaFin.
The cascading effects of the fall of Wirecard could be felt in the crypto space too as today, the FCA set numerous prohibitions on WCS saying that it “is no longer permitted to conduct any regulated activities” and “must not dispose of any assets or funds.”
The regulator added that it is working closely with Wirecard UK and other entities involved in the corporate mishap and that it would take any action it deems necessary to safeguard the interests of customers. FCA said:
“We are continuing to do this and 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.“
For the uninitiated, WCS issues Visa crypto debit cards for popular digital asset lending platforms including Crypto.com and TenX. Commenting on the development, Kris Marszalek, CEO, Crypto.com, tweeted:
This morning, the FCA effectively shut down Wirecard UK, the issuer of our cards in Europe.
Our EU/UK cards will stop working today. All customers will receive 100% credit back to their crypto wallets within 48 hours.
We’re moving the card program to a new vendor. https://t.co/jEdxMuwipq
— Kris | Crypto.com (@Kris_HK) June 26, 2020
All Is Not Lost
Despite the unfortunate collapse of Wirecard, optimists would hope that it wouldn’t have an irreparable impact on the encouraging customer demand for crypto debit cards.
In a blog post published today, Crypto.com stated that they’re working on transferring the card program to a new provider. This would enable the firm to resume the issuing of cards in the UK and Europe and allow existing and new customers to enjoy the benefits of the Visa crypto card again.
Earlier this year, BTCManager that Crypto.com’s MCO Visa Card was live on several popular payment apps including Google, Apple, and Samsung Pay.