Fintech biz Wirecard folds into insolvency like two pair against a flush. Good luck accessing your chip stack

Regulators freeze funds, stop affiliated finance apps from functioning


German electronic payment whizzkids Wirecard AG has filed for bankruptcy, three days after the arrest of ex-CEO Markus Braun on fraud charges – and the company's admission that €1.9bn in assets ($2.1bn) were missing and may never have existed.

"The management board of Wirecard AG has decided today to file an application for the opening of insolvency proceedings for Wirecard AG with the competent district court of Munich (Amtsgericht München) due to impending insolvency and over-indebtedness," the company said in a statement, adding that it is evaluating whether similar action will have to be taken by its subsidiaries.

One such subsidiary, the UK's Wirecard Card Solutions, posted a note on its website that it "has temporarily suspended its electronic money issuing, card issuing and acquiring business with immediate effect and until further notice."

That action follows from the UK Financial Conduct Authority's asset freeze order, issued on Friday to protect UK customers from the insolvency of Wirecard AG.

The order has frozen electronic cash in apps that rely on Wirecard as a payment processor, like Anna Money, Curve, Pockit, and Soldo, among others, to the dismay of customers.

Curve ball

"Following the effective shutdown of Wirecard Card Solutions Limited by the FCA, Curve services are temporarily suspended. We'll be back shortly but in the meantime please use an alternative payment method," the finance app said via Twitter.

In a blog post, Curve said it has accelerated its transition away from Wirecard and that cash balances are inaccessible for the time being but remain unchanged.

Soldo said it could be "a couple of days" before customers could access their funds again.

Several hours ago, Anna Money warned customers that the FCA freeze was coming and urged customers to "withdraw your money from your ANNA account as soon as possible."

The biz subsequently changed its tune and to customers that their money was safe, just temporarily unavailable.

"We expect the suspension to be lifted – the inability to use your account and card is temporary, and we are working to restore it as soon as possible," it said. "Your ANNA card details and the money in your ANNA account remain safe and secure – but unfortunately you cannot currently access them."

A German investor protection group, Schutzgemeinschaft der Kapitalanleger eV (SdK), on Friday said it had filed a criminal complaint against a former Ernst & Young GmbH auditor, Andreas Loetscher, now chief accounting officer at Deutsche Bank AG, and two current EY auditors.

According to The Financial Times, EY failed to ask for bank statements as part of Wirecard audit for more than three years. Looks like those auditing fees were well spent then.

The SdK said that the collapse of Wirecard will damage not just company shareholders but the entire German financial sector.

Braun, Wirecard's ex-CEO, is out on bail as German prosecutors prepare their case.

Wirecard's stock, valued at more than $100 per share last week, on Friday was trading at 78 cents. ®


Other stories you might like

  • Battlefield 2042: Please don't be the death knell of the franchise, please don't be the death knell of the franchise

    Another terrible launch, but DICE is already working on improvements

    The RPG Greetings, traveller, and welcome back to The Register Plays Games, our monthly gaming column. Since the last edition on New World, we hit level cap and the "endgame". Around this time, item duping exploits became rife and every attempt Amazon Games made to fix it just broke something else. The post-level 60 "watermark" system for gear drops is also infuriating and tedious, but not something we were able to address in the column. So bear these things in mind if you were ever tempted. On that note, it's time to look at another newly released shit show – Battlefield 2042.

    I wanted to love Battlefield 2042, I really did. After the bum note of the first-person shooter (FPS) franchise's return to Second World War theatres with Battlefield V (2018), I stupidly assumed the next entry from EA-owned Swedish developer DICE would be a return to form. I was wrong.

    The multiplayer military FPS market is dominated by two forces: Activision's Call of Duty (COD) series and EA's Battlefield. Fans of each franchise are loyal to the point of zealotry with little crossover between player bases. Here's where I stand: COD jumped the shark with Modern Warfare 2 in 2009. It's flip-flopped from WW2 to present-day combat and back again, tried sci-fi, and even the Battle Royale trend with the free-to-play Call of Duty: Warzone (2020), which has been thoroughly ruined by hackers and developer inaction.

    Continue reading
  • American diplomats' iPhones reportedly compromised by NSO Group intrusion software

    Reuters claims nine State Department employees outside the US had their devices hacked

    The Apple iPhones of at least nine US State Department officials were compromised by an unidentified entity using NSO Group's Pegasus spyware, according to a report published Friday by Reuters.

    NSO Group in an email to The Register said it has blocked an unnamed customers' access to its system upon receiving an inquiry about the incident but has yet to confirm whether its software was involved.

    "Once the inquiry was received, and before any investigation under our compliance policy, we have decided to immediately terminate relevant customers’ access to the system, due to the severity of the allegations," an NSO spokesperson told The Register in an email. "To this point, we haven’t received any information nor the phone numbers, nor any indication that NSO’s tools were used in this case."

    Continue reading
  • Utility biz Delta-Montrose Electric Association loses billing capability and two decades of records after cyber attack

    All together now - R, A, N, S, O...

    A US utility company based in Colorado was hit by a ransomware attack in November that wiped out two decades' worth of records and knocked out billing systems that won't be restored until next week at the earliest.

    The attack was detailed by the Delta-Montrose Electric Association (DMEA) in a post on its website explaining that current customers won't be penalised for being unable to pay their bills because of the incident.

    "We are a victim of a malicious cyber security attack. In the middle of an investigation, that is as far as I’m willing to go," DMEA chief exec Alyssa Clemsen Roberts told a public board meeting, as reported by a local paper.

    Continue reading

Biting the hand that feeds IT © 1998–2021