Wirecard, a Munich-based payment giant and the issuer of Crypto.com cards, is in trouble. Fears of its financial health have sparked a dump of its stock (GER: WDI)—listed at the Frankfurt Stock Exchange–after Ernest Young (EY), one of the top 4 auditing firms, discovered that it had misrepresented $2.1 billion of cash on its balance sheet.
Wirecard Stock Slumps, Accusations Of Fraud
This confirms previous indications that its trustee had attempted to cheat the auditor by creating a false impression of financial strength.
Following news of their attempts, its share slumped by 62 percent in the European session. By the time of writing, its shares were changing hands at €39.90, down 62 percent after the markets opened.
A blow to the firm, Wirecard has nonetheless issued a statement, assuring stakeholders that it is working with EY and will in due course provide clarification on the matter. Should Wirecard fail to submit its financial statement for the year 2019, billions worth of loans may be terminated, reports CNBC.
Still, this is not the first time Wirecard finds itself on the wrong side of the law. Previously, its Singaporean wing was accused of deliberating overstating revenue by forging and backdating contracts. Besides, its employees are said to have misled auditors by inflating revenue and sales at their Dublin and Dubai subsidiaries.
Crypto.com, Wirex, Among May Be Companies To Be Affected
There are no official statements from Crypto.com, TenX, CryptoPay, and Wirex, regarding this development. Wirecard is their main partner and the main issuer of their popular debit cards.
In 2019, Wirecard partnered with the now-canceled Telegram Open Network (TON). Through the TON labs, the goal was to create new digital financial products. Then, Georg von Waldenfels, Executive Vice President, Group Business Development at Wirecard, said:
“We are excited to be partnering with TON Labs. Their immense experience in highly scalable technology and decentralized solutions as well as the strong global growth of Telegram messenger will be instrumental for the success of our joint program.”