【Tech Cat Reviews 3C】Wirecard's 1.9 Billion Fraud Case Unveiled, Quick Guide to MCO Visa Card Issuer's Bankruptcy

This article is authorized to be republished from Lao Mao Tests 3C, original author Josh Lu Zijian

Wirecard, the payment giant in the German financial technology (FinTech) industry, announced on the 18th that it could not provide its 2019 financial statements, revealing a financial gap of up to 1.9 billion euros. This shocking news rocked the market, and on the 26th, it declared bankruptcy. The stock price plummeted from 104 euros to a low of 1.28 euros, a drop of 98.7%. Companies collaborating to issue crypto financial cards, such as Crypto.com, WireX, TenX, were all affected. Among them, the company issuing the MCO Visa card, Crypto.com, was also impacted and had to temporarily halt its operations in the UK and Europe.

News of Wirecard's bankruptcy on the 26th triggered panic selling, with the stock price dropping by 99%.

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Wirecard Bankruptcy Event Summary

1. On June 18, Wirecard was embroiled in a scandal where €1.9 billion in funds were found to be non-existent, leading to the inability to provide the 2019 financial report.

2. On June 19, Wirecard CEO Markus Braun resigned, and Wirecard started negotiations with banks regarding the €1.9 billion.

3. On June 23, Wirecard CEO Markus Braun was arrested.

4. On June 26, Wirecard's German headquarters filed for bankruptcy.

5. On June 26, the UK Financial Conduct Authority (FCA) requested the suspension of MCO cryptocurrency card services in the UK and Europe due to Wirecard's issues. Crypto.com immediately informed customers and refunded stored amounts within 48 hours.

6. On June 26, the CEO of Crypto.com reassured on Twitter that customer funds were safe and they were working to find a new card issuer to resume services in the UK and Europe.

7. On June 30, due to the freeze on Wirecard's operations and funds to ensure customer asset safety, some users faced difficulties accessing their funds. Conditional restrictions are currently in place to protect user assets. The FCA has notified Wirecard to resume its e-money and payment services.

8. On June 30, Wirecard announced on their official website that e-money and payment services would be restored within 24 hours.

9. On June 30, Singaporean fintech group MIX Fintech announced that, to mitigate the impact of the Wirecard incident on the financial market, they would provide free card replacement services for Wirecard's major clients through their global cross-border payment company Mixpay.

How Will Wirecard's Bankruptcy Affect the Future Development of MCO Visa?

During this event, Crypto.com was affected, not due to operational issues but still experienced some impact. The price of MCO token briefly dropped to around $4, but under the company's prompt refund and handling of stored amounts, several key points are worth noting:

1. On June 26, MCO Visa card temporarily stopped using credit card top-up channels, and only cryptocurrency channels are currently available for top-ups.

2. MCO's card business in the U.S. remains unaffected as the issuing bank is Metropolitan Bank, not Wirecard.

3. The issuing companies for Asia Pacific and Australia are Wirecard subsidiaries, and local governments have not yet prohibited their operations, so card issuance is normal.

4. Whether a replacement issuer for Wirecard will be found in the future.

5. On July 1, MCO Visa credit card top-up channels will resume.

Due to Crypto.com's swift handling, the token price stabilized immediately, providing users with a certain degree of confidence. Overall, the impact was not due to poor company performance leading to operational issues, so the company's tokens CRO and MCO did not suffer significant impacts. A key point to watch for is Wirecard's successful restoration of e-money and payment services in the UK and Europe within 24 hours by July 1.