The former CEO of Wirecard, a German Fintech, was arrested by the Munich police after he was accused of misrepresenting the company’s funds.
As reported by Reuters and many others, Markus Braun, who ran the company for nearly two decades, was arrested by police in Munich, Germany. According to a statement issued by the prosecutor’s office, he is accused of conspiring to inflate shares and total revenues through false transactions with „third parties“. This was done to make the company appear more attractive to investors, prosecutors say.
A crypto-currency debit card issuer would have lost $2.1 billion in cash
1.9 billion, or $2.1 billion, are held in a trust account with two unspecified banks in the Philippines. On June 21-22, Wirecard’s board of directors issued a statement saying that „with a high degree of probability“ the funds do not exist.
The money represents more than 32% of Wirecard’s claimed ?5.8 billion ($6.5 billion) stock. As the problem finally emerged last week, Braun resigned.
A judge is expected to make a decision today, June 23, on whether he should remain in custody.
eCommerce and Fintech have grown during the confinement in Latin America
Company in trouble
The budget gap and all the controversy it caused raised questions about whether the company Bitcoin Up would be able to recover and survive in the long term. As Cointelegraph mentioned earlier, Wirecard is the leading issuer of debit cards in cryptosystems, such as Crypto.com and Wirex.
Crypto.com’s CEO, Kris Marszalek, pointed out that its debit cards are fully pre-funded and the reserves are held at a separate bank in the UK, different from Wirecard.
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Meanwhile, Wirecard’s stock fell by about 84%, to $16, when the news broke.
The long-term fate of the company remains unknown, but the cards issued by Wirecard continue to operate normally to date.