Wirecard, a crypto card provider that is currently involved in insolvency proceedings, has been allowed by the FCA to start operating again in the U.K.
The Financial Conduct Authority (FCA) announced on Tuesday that it permitted Wirecard’s U.K. branch, Wirecard Card Solutions, to resume its e-money and payment services, but there will still be some restrictions for the company.
Wirecard is a popular crypto card issuer that provides its services to companies such as Crypto.com and TenX. These cards are now reactivated for UK users after the FCA has given their written approval. The financial authority forced the company to stop all its operations on Friday after its parent company filed for bankruptcy in Germany.
Curve, Pockit, Anna, and Morses Club’s U Account were some of the fintech start-ups affected by the shutdown of the firm. Curve bypassed these restrictions by changing to a different payment processor this weekend.
“There may be a delay before all card programmes are fully operational, so some customers could find themselves unable to transact immediately but we anticipate this lasting no longer than 24 hours,” stated Wirecard Card Solutions on Tuesday. “We apologise for the inconvenience to our valued customers that the temporary suspension caused.”
But while the company is allowed for now to operate, the incident could have a negative impact in the long term on people’s trust of fintech companies. Curve and Anna depend on e-money licenses to process payments but lack their own banking licenses which means they can’t hold customer funds. The money is sent through a third-party bank.
The Munich-based card issuer has stated that it will continue to operate in spite of its insolvency proceedings, which is taken as the first sign of bankruptcy. The company went into insolvency last week after noticing 1.9 billion euros ($2.1 billion) missing from its balance sheet. Its former CEO Markus Braun had been arrested on charges of misrepresenting the company’s balances, but is now out on bail.
It is not yet known it its subsidiaries will have to apply for insolvency as well, but the company has stated that it was looking into that matter. The North American subsidiary of Wirecard, acquired from Citigroup in 2016, announced that it was looking for a buyer this Monday.
Wirecard’s Singapore unit is currently waiting for the country’s central bank to assess if it will be able to continue offering services in the country after its parent company files for insolvency.
Wirecard shareholders have already submitted legal proceedings against Ernest and Young for its alleged failure in auditing the credit card issuer.
Featured image: TeleTrader