Wirecard, a company whose subsidiary issues Crypto.com’s MCO Visa card and TenX’s Visa Debit Card, has filed for insolvency. This comes after it was reported that auditor Ernst & Young was unable to confirm that $2.1 billion appeared on the company’s trust accounts, and its former CEO was arrested.
Wirecard Files for Insolvency
As CryptoPotato reported earlier this month, auditing company Ernst & Young was unable to confirm that $2.1 billion appeared on Wirecard’s trust accounts.
Shortly after that, the former CEO of the payment processor, Markus Braun, was arrested on suspicion of falsifying accounts. He was later released on a 5 million EUR bail as the mystery of the missing billions continues.
Now, Wirecard has reportedly filed for insolvency.
Shares of the company were suspended before the announcement of the Frankfurt Stock Exchange. Presently, they have lost upwards of 90% of their value following the reports of Ernst & Young, which also led to the resignation of Braun.
Wirecard is also the parent company of Wirecard Card Solutions, which issues the popular Crypto.com MCO Visa Card. Previously, the CEO of Crypto.com said that no customers’ funds are in jeopardy.
The Next Hertz?
The case of Hertz Global Holdings is one of the most widely-discussed amid investors. It’s one of the largest car rental corporations in the US, and it’s listed on the New York Stock Exchange (NYSE) under the HTZ ticker.
In late May, this year, the company filed for bankruptcy. A couple of weeks after that, however, HTZ shares surged by more than 1000% as retail investors flooded the market.
Even though legacy markets are currently recovering, there’s an outlined uncertainty amid many investors, given the current overall situation. The coronavirus (COVID-19) continues to spread, and even though a lot of the countries lifted the heavy measures, there are fears that another lockdown is underway.
Moreover, the George Floyd protests have escalated substantially throughout all of the states and even abroad.
It’s this uncertain environment that makes many investors wary, and it’s interesting to see if Wirecard’s shares will follow what happened to HTZ. It’s worth noting, though, that the former is based in the EU, while the latter is a US-based company.