The major financial technology company Wirecard, which issues Crypto.com debit cards, has become controversial as some of its employees appear to have defrauded the company.
The Financial Times reported on 18 June that the auditors of the accounting company EY „could not confirm the existence of 1.9 billion euros in cash“, or around 2.1 billion dollars.
According to a company press release an administrator of Wirecard’s bank accounts tried to mislead the auditor and falsely indicate the existence of the cash balance.
Crypto.com claims that its card is the “most widely available“ after its expansion in Europe
The company’s share price plummeted by almost 50% on Thursday after the problem came to light.
According to earlier reports in the Financial Times, Wirecard’s staff in Dubai and Dublin appear to have been conspiring to falsely inflate sales and profits for nearly a decade.
Are crypto-cards in danger?
Crypto.com’s popular debit cards are issued by WireCard, which could be a problem for the company.
The Wirex payment platform reaches 3 million users
While it is unlikely that users‘ funds will be directly threatened, the hole in the reserves could lead to disruptions in the service of WireCard-issued cards. Cointelegraph contacted Crypto Trader for comments, but did not receive an immediate response.
However, Crypto.com is not the only provider that could be affected by this. WireCard is currently the debit card issuer for Wirex, TenX, and CryptoPay.
A notable exception in this group is the Coinbase Card, which is currently issued by PaySafe Financial Services. In addition, Coinbase became a primary issuer of Visa in February, which would place it on the same level as WireCard and PaySafe. However, the company has not yet directly issued its own debit card.
Cryptopay enables bank transfers in the UK with sterling
There are few providers willing to work with crypto-currency companies, and the crypto-debit card industry remains largely vulnerable to major issuers in distress. In January 2018, the sudden collapse of WaveCrest left virtually all crypto debit card companies without a product.
It is unclear whether WireCard’s problems will lead to a similar phenomenon, although this is different from the example of WaveCrest, which simply revoked its Visa license.