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Crypto Debit Card Issuer Wirecard Missing Over $2 Billion in Cash as Auditor Raises Questions

Shares of Wirecard, a German payment company, have fallen more than 60% after the company announced that its auditor, Ernst & Young (EY), raised questions over missing balances worth 1.9 billion euros (over $2 billion) of cash. The auditor said that it did not have adequate evidence for 1.9 billion euros of cash balances on Wirecard’s trust accounts. The missing funds amount to an estimate of a quarter of its total balance sheet.

Wirecard stated that there was evidence of “spurious” figures provided by a third party in order to deceive the auditor.

Wirecard joined Germany Blue Chip Stock Market Index two years ago. During that time, the company was valued at €24 billion. But following the latest plunge of its share price, the company’s value has declined just to €4 billion.

The future looking sore for the Fintech company

The company’s statement said that a trustee of Wirecard’s bank accounts tried to deceive the auditor and falsely indicated the existence of the cash.

Wirecard stated that the missing funds were supposed to be held in accounts in Asian banks and had been set aside for “risk management.” However, the auditor disclosed that the banks had been unable to provide the account numbers.

The scandal came after numerous articles published by the Financial Times in the previous year looking into alleged accounting irregularities in Wirecard’s Asian operations. The Financial Times earlier reported that Wirecard staff in Dublin and Dubai seem to have conspired to falsely inflate profits and sales for nearly a decade.

Wirecard is a major fintech company that issues crypto debit cards to various blockchain firms including Crypto.com, among others. The current problem facing Wirecard could put crypto card providers in jeopardy.

Although it is unlikely that crypto user funds are directly threatened, the mess in the Wirecard’s reserves could lead to service disruptions on crypto cards that the company issues. Currently, Wirecard is the debit card issuer for Crypto.com, CryptoPay, TenX, and Wirex.

Most providers are not willing to work with crypto firms. The crypto debit card industry, therefore, remains vulnerable to a few struggling principle issuers. In 2018 January, WaveCrest payment service provider collapsed and completely left all crypto debit card firms without a product, however, it remains unclear whether issues facing Wirecard would result in a similar scenario.

Binance launched new crypto debit card issued by VISA

In March 2020, Binance launched its new crypto debit card with the aim of providing crypto payment services anywhere around the globe. However, Binance is not the only cryptocurrency exchange that pursues this concept.

Last year, Coinbase unveiled a similar product, and many more exchanges are increasingly seeking to enter into the crypto debit card industry. With the number of crypto users skyrocketing, the number of blockchain-based debit cards is rising in the payment market.

Russian Intelligence are Hiding Embezzler and Former Wirecard COO in Belarus

Jan Marsalek, the former Chief Operations Officer of the now-defunct Wirecard payments firm, has been located in Belarus after supposedly heading to the Philippines to track down nearly 2 billion Euro missing from the firm’s spreadsheet. Jan Marsalek promptly disappeared shortly after undertaking an investigation for the Wirecard missing funds—which he claimed would clear him of any wrongdoing. However, new evidence suggests that he never made it to the Philippines at all, but has been in hiding with the help of the FSB, a Russian intelligence agency.Marsalek was reported to have entered the Philippines where he flew from Manila to Cebu and then on to China in June. However, the Philippines immigration authorities have asserted that there is no evidence he ever arrived or records of his supposed flight from Cebu City to China.

Where in the world is Jan Marsalek?

German Wirecard collapsed last week after auditors Ernst & Young raised the issue with a nearly 2 billion Euro hole in financial services provider’s books. The 40-year-old Austrian citizen, Marsalek, who held the position of COO of Wirecard since 2010, was in charge of the company’s Asian operations.

On 18 June 2020, Jan Marsalek along with the entire management team, was fired. Marsalek explained to his colleagues that he was going to the Philippines to chase and find the missing billions, in order to prove his innocence—only to go missing himself later that day.

Although there were airline bookings and immigration records that showed he had made his way to Manila on the 23 June and left onward to China, a deeper investigation by the Philippine authorities found that that the trip appeared to have been a distraction tactic, and immigration records had been forged on his behalf. IT was at this point that Marsalek became wanted by German and Austrian authorities on the charges of fraud and embezzlement.

According to a report by investigative journalists from Bellingcat, Der Spiegel, and the Insider on July 18, Marsalek has fled to Minsk, the capital of Belarus. In addition, the collaborative investigation also uncovered Russian immigration records and data kept by Russia’s Federal Security Services (FSB) that suggest that Russia’s security service had a long-standing interest in Marsalek, who used a number of different passports – including a third-country diplomatic passport – to visit Russia dozens of times in the last 15 years. In 2017, it appears that Russia’s security services are likely to have had met with Marsalek in Moscow on one of these trips.

Source: Bellingcat Report

The investigation points to Marsalek receiving help from Russia’s FSB intelligence, Bellingcat wrote:

“FSB has complete control over the Russian border service and thus over the centralized Russia-Belarus border database. Therefore any manipulation of data would have to be done at the behest of, or at least with the consent of, the FSB.”

Marsalek being free to traverse these FSB controlled borders undetected does appear to directly indicate collaboration between the former Wirecard COO and Russian Intelligence.

The data shared by Bellingcat shows that he flew to Belarus on June 19th and has not yet left the country.

Wanted Wirecard Exec Marsalek Hiding in Russia After Moving Funds in Bitcoin

Former Wirecard Chief Operating Officer Jan Marsalek used Bitcoin to move funds to Russia where he is now in hiding, according to a Russian media outlet.

Jan Marsalek, the former Chief Operations Officer of the now-defunct German Wirecard payments allegedly sent Bitcoin (BTC) from Dubai into Russia, where he is now reported to be hiding.

According to a local Russian media report on July 20, Jan Marsalek is hiding from German and Austrian authorities in a private house outside of Moscow under the watch of Russian intelligence operatives. The amount of BTC cryptocurrency Marsalek sent prior to his arrival in Russia was not reported.

Marsalek Ties to Russian Intelligence

German payment firm Wirecard collapsed after auditors Ernst & Young raised issue with a nearly 2 billion Euro hole in financial services provider’s books. The 40-year-old Austrian citizen, Marsalek, who held the position of COO of Wirecard since 2010, was in charge of the company’s Asian operations.

Marsalek was last reported to have been in Belarus. According to investigative journalists from Bellingcat, a collaborative investigation uncovered Russian immigration records and data kept by Russia’s Federal Security Services (FSB) that suggests that Russia’s security service has had a long-standing relationship with Marsalek. Marsalek is reported to have used a number of different passports – including a third-country diplomatic passport – to visit Russia dozens of times in the last 15 years. It also was found that immigration records had been forged on his behalf to cover his tracks as he made his way into Minsk, the capital city of Belarus.

The investigation points to Marsalek receiving help and having links to Russia’s FSB intelligence, Bellingcat wrote, “FSB has complete control over the Russian border service and thus over the centralized Russia-Belarus border database. Therefore any manipulation of data would have to be done at the behest of, or at least with the consent of, the FSB.”

Marsalek is currently wanted by German and Austrian authorities on the charges of fraud and embezzlement related to the 2 Billion Euro that went missing from Wirecard.

Wirex Moves on From Defunct Wirecard, Secures New Partnership with Railsbank

Crypto payment service provider and Visa principal member, Wirex has finally moved on from Wirecard, the bankrupt payment giant, who has served as the firm’s card provider to date.

Wirex confirmed the move with the announcement of a new partnership with Railsbank that will see the London-based FinTech provide Wirex cards in the APAC region.

The firm claimed that the partnership with Railsbank is one of its many partnerships with regulated and trusted card issuers in different regions and represents a step forward for the firm. Wirex affirmed that the partnership helped the firm to carry out a rapid migration of existing and new customer’s accounts away from Wirecard in the APAC region, and into Railsbank.

“Wirex’s new partnership with Railsbank reinforces our core goal of protecting existing customers’ funds, whilst continuing to innovate in a legal and compliant manner. Working alongside them allows us to continue empowering our customers to buy, hold, exchange, and spend multiple traditional and cryptocurrencies whilst minimizing the risk to their funds.” Wirex Co-founder and Chief Executive Officer Pavel Mateev said in the official statement.

Wirex Breathes a Sigh of Relief From Wirecard’s Embezzlement Saga

Blockchain.news reported back in June that Wirecard, Wirex’s former card provider got embroiled in a $2 billion fund misappropriation as uncovered by external auditors. The ensuing financial dip eventually caused the German payment service provider to declare bankruptcy thus declaring itself unfit for business.

In the heat of the investigation, Britain’s top financial watchdog, the Financial Conduct Authority (FCA) suspended Wirecard Card Solution Ltd, Wirecard’s subsidiary responsible for the issuance of Visa crypto debit cards, a situation that plunged the firm’s customers and partners into unfounded crypto card service disruption.

As detailed in the partnership announcement with Railsbank, Wirex says it is now better positioned to serve its 3 million customers, consolidating its growth for the past 18 months.