UK fintech firms forced to suspend services after Wirecard collapse

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UK fintech firms forced to suspend services after Wirecard collapse
UK fintech firms forced to suspend services after Wirecard collapse (Provided by Financial World)

On Friday, the British FCA (Financial Conduct Authority) had suspended activities of the scandal-hit German payments firm Wirecard AG’s UK units, which in turn led to a havoc-scale chaos on the British firms which were relying on the beleaguered German payment firm’s services.

In point of fact, latest move from the British FCA came forth a day after the German payment processor, once the second-largest fintech firm in Europe, Wirecard AG had filed for an insolvency in a Munich court citing nearly €4 billion in debts that came up alongside its missing €2 billion, a search for which had hit a dead-end in the Philippines after the Southeast Asian country’s Central Bank Governor said earlier this week that the money had never entered into the country’s financial system, while the payments firm’s decade-long auditor EY was quoted saying yesterday that Wirecard AG had fabricated a number of escrow documents and sent them to relevant authorities alongside securities exchange commission, raising possibilities of a number of legal actions including market rigging and financial fraud.

Besides, as UK FCA decision to suspend all of Wirecard units in Britain had forced a number of UK-based fintech companies to process payments or to access their money, thousands of customers were reportedly complaining in the social medias on whether they would be able to get their money back.

FCA’s safeguarding rules to protect customers money

Meanwhile, as a number of customers of British fintech firms such as ANNA were unable to access their accounts following the latest move of UK FCA, in a statement on Friday, the UK FCA was quoted saying that its so-called safe-guarding rules would protect and return customers’ money, should a firm collapse.

In factuality, owing nearly €4 billion to its creditors following termination of its roughly €2 billion debts deals last week after reveal of the missing money from Wirecard AG’s 2019 balance sheet, the German payments firm, whose shares had pummelled nearly 99 per cent since the disclosure of the fraud, had sent a wake-up call to the German financial watchdogs, urging for an immediate overhaul to avert similar events.