In the present age of technology, the latest new options can be much useful to a large extent. The latest option in the field of information technology Blockchain is the most useful option. Many of the leading companies also have adopted this technology. In a shocking development, Wirecard, which was one of the leading crypto debit card issuers, has collapsed, and this has led to a panic situation in the crypto market. The German financial tech company was a significant player in this market, and its sudden collapse has sent shock waves across the industry. This indeed is a huge blow to the industry, and there is a need for more transparency and authority to control such things in the long run. However, there are experts who have suggested various actions that can help the system to have more security and ease of utility.
Crypto association of Wirecard
Like many other segments, there is also an association that can help users and players in this field. German company Wirecard made its association with crypto card providers and emerged as a major payment processor in the market. It even entered the German stock market DAX in recent years. It is much interesting to note at this stage that Wirecard was involved in payment processing tasks for pornographic and gambling sites for 2 decades. With its technological expertise in this field, it became a good bet for the crypto industry in a short time.
The Wirecard scam
In recent weeks, many incidents happened that led to the collapse of this company. Recently, Ernst and Young’s auditors reported that close to $2 billion was untraceable in the accounts of Wirecard. It was later discovered that the funds did not exist at all, and it was just shown in the books. Later, the insolvency filing was done, which led to the arrest of CEO Markus Braun. After this, the UK’s financial regulator suspended the Visa crypto debit cards. But, the ban was lifted after a few days. The situation as of now is very grim for the company, and its stock price has collapsed. However, many investors are showing interest in buying the company, and it may find a suitable partner in the near future. The buyers are willing to have a share in it and take it to a new height.
Impact on the crypto market
This has become an embarrassment for the crypto industry, and many players are now very cautious about the entire industry. The entire regulatory framework of Germany has now been blamed, and many genuine financial institutions are also facing the heat due to this scandal.
How big is this loss?
The company has issued millions of cards over the last few years, and all of them are useless at this stage. If the customers are not able to reactivate their cards through an alternate service provider, they will lose trust in such service providers in the long term. The only saving grace in this entire scandal is that Wirecard did not have access to the funds of users. It was only processing the payments of consumers who used the cards.
Users now have to choose another service provider who can take over from here and provide better services. It is also well known that Wirecard may itself continue to issue cards through its subsidiary companies considering all these problems; users are now very cautious about such payment processing companies and losing trust in the entire crypto industry. This can have a negative impact on the industry, and something needs to be done collectively to prevent such issues in the future.