The shareholders of German Fintech Wirecard are initiating legal proceedings against EY, one of the „Big Four“ (an English term used to refer to the world’s leading firms in the consulting and auditing sector) regarding the consequences of the scandal that now involves the company.
Wirecard’s Stock Market Rise Nearly 200% Due to Possible Buyout Interest
Earlier this month, the auditor refused to sign Fintech’s 2019 financial report after discovering the disappearance of 1.9 billion euros (about $2.1 billion) from its books.
Following EY’s discovery, German authorities arrested Wirecard’s CEO (now ex-CEO), Markus Braun, who had been in charge of the company for nearly two decades.
Braun was accused of conspiring to inflate the company’s assets and falsifying more than 32% of Wirecard’s assets, $2.1 billion of the $6.5 billion claimed.
According to CNBC on June 26, Ethereum Code stated that there are „clear indications that this was an elaborate and sophisticated fraud, involving multiple players from around the world in different institutions, with a clear and conscious goal of scamming.
The auditor defended his position, stating that „even the strongest and most comprehensive audit procedures“ could not derail a „collusive fraud“ of this nature.
Payoneer cards frozen for Wirecard’s troubles
The German shareholders‘ association, Schutzgemeinschaft der Kapitalanleger e. V. (SdK), however, filed a criminal complaint against three EY auditors (two current and one former) for their alleged role in the accounting scandal.
Kryptomoney debit cards affected by the Wirecard controversy
On 25 June, Wirecard filed for economic insolvency. As the extent of the alleged fraud became apparent, regulators decided to suspend its subsidiary, Wirecard Card Solutions Ltd.
The incident has raised concern in the cryptoactive industry, as Wirex, TenX and CryptoPay debit cards are among the cards issued by Wirecard.
Crypto currency cards are affected because the UK regulator has suspended Wirecard’s subsidiary
As a result of the regulators‘ action, Crypto.com was asked to cease operations on its EU and UK cards, but returned all funds from the affected debit cards to the customers‘ crypto wallets.
It was reported that the company is currently working on transferring its card program to a new provider.