Wirecard and Crypto.com – scam or bump in the road ?

If you are a cryptocurrency enthusiast like me, you should have seen the news, that the online banking Wirecard, has collapse and re-bounced from media. If you haven’t below is the summary:

Background:

“Founded in 1999, Wirecard AG is a fully licensed German bank. The Wirecard Card Solutions Ltd. (WDCS) is a subsidiary of Wirecard AG with e-money license. Conglomeration of these two companies provided Visa card services to crypto based companies like crypto.com.

On 28 April 2020, the KPMG audit report claimed they were unable to verify Wirecard’s third-party profits. Then the CEO, Markus Braun [1] rejects all allegations and blamed it on the ongoing COVID-19 crisis. During the same time, Singapore trustee cut ties with Wirecard but crypto.com didn’t.

On June 18, 2020, Ernst & Young, audit report claimed a missing sum of $2 billion in the Wirecard balance sheet. Still, crypto.com didn’t respond nor inform the clients about their main Visa card provider’s blunder.

Then the Wirecard CEO, Markus Braun stepped down the next day, where he was detained by German police under the charge of ‘suspicion of accounting fraud and market manipulation’. He was then released on bail of $5 Million, has now suggested the company itself may be the victim of fraud.

Crypto.com Response :

As a result of Wirecard gone down, crypto.com customers in the UK and Europe funds were frozen. [2] After keeping crypto.com customers in limbo for nearly a month, crypto.com has put an announcement on 26th June saying due to the Wirecard issue UK and Europe customers are not able to use their visa cards. [3]

On 29 June 2020, the Wirecard UK has given permission by the FCA to resume payment services and crypto.com has onboarded the Wirecard wagon again. [4]

The jury is out:

I have no issues with services like crypto.com, which introduce non-technically-savvy users to cryptocurrencies. It about where to draw the line when taking risks. Depending on the effort companies put to market their services to users by promoted sponsored content in social media, we tend to think the big names can be trusted. If you search on youtube about crypto.com, it is merely impossible to see a single video discussing issues, and the reason? because Youtubers, can simply earn $50 for just promoting crypto.com website.

Unfortunately, history has taught us lessons that none of us should forget. The grand theft of once most popular crypto exchange Mt. Gox, Australia’s ACX exchange scandal, are examples of big companies taking our hard-earned money and fleeing where authorities lie low.

Last but not least, the most important thing to remember by every crypto enthusiast: If you don’t have private keys for your asserts, it’s not yours!

Disclaimer: This article nor any articles published related to cryptocurrency do not advocate any financial advice, always do your due diligence before you invest and never invest more than you can afford to lose.

Read More:

‌Crypto.com | Official Blog. (2020). Our statement regarding MCO Visa Cards issued by Wirecard UK for Europe. [online] Available at: https://blog.crypto.com/our-statement-regarding-wirecard-uk/ [Accessed 20 Jul. 2020].

[3] Crypto.com | Official Blog. (2020). Update: Europe/UK MCO Visa Cards Have Been Reactivated. [online] Available at: https://blog.crypto.com/update-mco-visa-card-europe-resumes-operation/ [Accessed 20 Jul. 2020].

[4] Crypto.com | Official Blog. (2020). Update: Europe/UK MCO Visa Cards Have Been Reactivated. [online] Available at: https://blog.crypto.com/update-mco-visa-card-europe-resumes-operation/ [Accessed 20 Jul. 2020].

Collins, B. (n.d.). Wirecard Collapse Drags Down Online Banking Services. [online] Forbes. Available at: https://www.forbes.com/sites/barrycollins/2020/06/26/wirecard-collapse-drags-down-online-banking-services/#727b8f2f2e28 [Accessed 20 Jul. 2020].

[2] ‌Stevens, D./ R. (2020). Crypto.com, TenX crypto debit cards frozen following Wirecard scandal. [online] Decrypt. Available at: https://decrypt.co/33695/crypto-debit-cards-frozen-following-wirecard-scandal [Accessed 20 Jul. 2020].

‌[1] Wikipedia. (2020). Markus Braun. [online] Available at: https://en.wikipedia.org/wiki/Markus_Braun [Accessed 20 Jul. 2020].

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