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I just saw an incredible coincidence! What do you think?
The CEO of crypto.com is called Kris Marszalek and he is also accused of tax fraud for his former company Ensogo.
And the executive director on the run for tax fraud at Wirecard is Jan Marsalek.
Knowing that crypto.com is a Wirecard client. Did they know each other? Are they from the same family?
Or is it pure coincidence???
Yesterday, Wirecard's stock price collapsed by 97%. Basically, today, it's no longer worth a peanut.
And we're not talking about a small box. It is a company which is listed in the DAX (German index of the 30 largest companies). It generates 125 billion per year in profits; This is why it was one of the darling companies of Frankfurt and Germany. KLM (Air France) is a customer of Wirecard, for example.
There is even talk of the "financial scandal of the decade"... That shows the magnitude of the thing.
But what interests us here is its impact on Crypto.com companies
When a giant falls like this, the cause is usually always just as great.
The news caused a stir for several reasons. First of all, Wirecard is in fact a very large German group listed on the stock exchange, with international subsidiaries, specializing in financial services.
Since Friday, the announcement has come: The Wirecard company is filing for bankruptcy. And, as it is the issuer of numerous bank cards for crypto companies like Crypto.com, the noise was resounding.
And, if this caused a lot of noise, it is for two main reasons:
- The company has many partnerships, which means that a shutdown has dramatic consequences for its partners.
- The origin of the closure of the company is not a simple accounting anomaly. There is a hole of 2 billion with accusations of fraud in particular. Skillful compatible makeup lifted by Financial Times.
In addition, as you know, this type of scandal brings other elements to light and this will perhaps shed light on the situation for other companies….
First of all, before going into the details of this little investigation around the Wirecard affair, I prefer to clarify certain elements on what cal concretely implies for you who perhaps have a credit card with Crypto.com or another Wirecard partner.
Indeed, cryptoPay, TenX, Wirex (partially) and especially Crypto.com are Wirecard clients.
1/ What about Crypto.com and Wirex?
First of all, you should know that Wirecard is a bank card issuer and you should know that there are many (more or less) that offer this type of service.
This means, for example, that for Crypto.com, which announced that it was "temporarily ceasing its card activities", this will only be temporary.
Moreover, you should know that this only affects the United Kingdom and Europe. Asia and America are spared.
Basically, currently, crypto.com cards are useless and should be thrown in the trash. It is not possible to recharge your card, make a payment or any transaction. Useless, empty, to throw away.
Yes, the funds will be transferred to the crypto.com wallet while waiting to find another service provider who will send new cards.
The company published an article on its site, indicating that this would be fixed in 48 hours…Seriously? No, finding your funds, perhaps, but from there to having new cards, it's not going to happen in 48 hours. For sure.
So, the numerous European users of crypto.com will find themselves in trouble.
So it’s the competition that will be happy…
That said, in 24 hours, the MCO token fell by 6%… And the CRO token by 2%.
What does this mean for Crypto.com, the main concerned?
This means several negative things, actually.
This shows that the leaders of crypto.com are not very alert about their partners. The big offer from their company is the crypto.com card and they have not followed the matter closely. I mean, such a big company should know what's going on with its suppliers. She only has one, after all.
It's not like Orange or KLM who have to manage several suppliers even if they too can be criticized for the same thing.
Because an article in the Financial Times had already raised suspicions before other commissions of inquiry got involved and pointed out the flaws. This is from October 2019 all the same.
The second thing is that this can awaken the chaotic past of the CEO of crypto.com, who is also based with the cash register of his former company.
Wirex has no impact
In fact Wirex has formed partnerships with Wirecard but not for all of these cards. That is to say that it has other card issuers and that is why there is no problem.
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2/ This is not the first time this has happened…
I also wanted to remind you that this is not the first time that the crypto world has been shaken by this type of event.
Moreover, it turns out that the manufacturers and issuers of bank cards (Visa or Mastercard) are mainly reluctant to work with crypto companies. There have in fact been so many crypto companies which have turned out to be pure scams that now companies are more suspicious….
Thus, we remember wave crest which, in 2018, had suspended their partnerships, such as Bitwala and CryptoPay, after strong suspensions with certain clients.
3/ Fraud, corruption and money laundering…
You should know that in this affair, there have been several twists and turns and that today, we have the final point.
There were whistleblowers like the Financial Times who were the first to reveal flaws in the accounts of the Wirecard company.
The most surprising thing is that this article was not really taken seriously by Wirecard's supporters.
Some, a very small group, aware of the problem, followed the alert and sold short. A very good position, shall we say.
On the other hand, Ernest Young's entire credibility will be destroyed because she validated the company's financial statements.
On the other hand, for KPMG, it is euphoria, because it is she who openly decreed that she could not validate the balance sheets because they lacked essential information, namely the famous capital of 2 billion euros believed to be in two banks in the Philippines.
So it turns out that they don't even have a bank account open in the Philippines...
Thus, the CEO was arrested and released with a bail of 5 million euros…
So, that's it for the news around I crypto.co and the Wirecard company.
You can also see the video I made on this subject:
See also:
