Millions of dollars belonging to global freelancers stuck indefinitely amid Wirecard fraud
Wirecard collapsed on Thursday owing creditors almost $4 billion after disclosing a hole in its books that its auditor EY said was the result of a sophisticated global fraud. The insolvency filing did not include the company’s Wirecard Bank unit, which holds an estimated 1.4 billion euros ($1.57 billion) in deposits and is already under emergency management by BaFin, the German banking regulator.
On 26 June 2020, the FCA imposed a number of requirements on Wirecard including, that the firm:
- must not dispose of any assets or funds
- must not carry on any regulated activities
- must set out a statement on its website and communicate to customers that it is no longer permitted to conduct any regulated activities.
This follows publication to the FCA’s Register of a number of requirements that have been applied to Wirecard’s authorisation from 19 June 2020. The full requirements have been published to the FCA Register.
There are ongoing events in Germany concerning companies closely linked to Wirecard. Wirecard’s parent company, Wirecard AG based in Germany is currently the subject of law enforcement interest and insolvency proceedings. Wirecard AG is not supervised by the FCA.
The company said it was in talks with the FCA about its Wirecard Card Solutions Ltd unit and was hopeful that it will implement measures that allow it to resume operations.
Wirecard’s former CEO Markus Braun was detained this week on suspicion of falsifying accounts before being released on bail.
The group’s statement said that interim CEO James Freis “took a new approach to investigate the known allegations immediately upon taking office” on Monday.