Crypto.com to Refund Clients As Wirecard’s Card Issuer Told to Cease Operations
Crypto.com has confirmed to CoinDesk it is moving to refund customers as the U.K. regulator orders Wirecard’s card issuer to cease all operations immediately.
Crypto.com CEO Kris Marszalek told CoinDesk they were refunding 100% of customer funds as the Financial Conduct Authority (FCA) suspended the activities of Wirecard Card Solutions, a subsidiary of the Wirecard Group, which filed for insolvency on Thursday after admitting last week to be missing $2.1 billion.
“We will rapidly proceed to credit the funds back to our users crypto wallets,” Marszalek said.
All funds will be refunded in the next 48 hours.
The FCA ordered Wirecard Card Solutions to cease all regulated activities on Friday. The financial watchdog said it had stepped in to protect customer funds and would prevent the company from accepting or disposing of any more revenue.
While Wirecard Group is headquartered in Munich and is outside the FCA’s jurisdiction, Wirecard Card Solutions has its offices in Newcastle, in the north of England. Friday’s announcement affects all cards issued by Wirecard Card Solutions, including those belonging to Crypto.com and TenX users. Although it still isn’t clear what could happen, one possibility is that all Wirecard cards stop working.
Users will not be able to top up or transact with Crypto.com cards from later today.
See also: Crypto.com Rolls Out Visa Card to 31 European Nations
Both Crypto.com and TenX kept quiet after Wirecard admitted last Thursday that its $2.1 billion accounting hole may have come from employees purposefully inflating company revenue.
Both companies assured customers that their funds were safe, as they were held by a separate financial institution, but representatives refused to say whether they were looking for another card issuer.
But Friday’s news has now forced their hands.
“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 said.
In a statement published just as CoinDesk went to print, Crypto.com said it was in the process of transferring its card program to a new provider.
TenX did not immediately respond to requests for comment.