Crypto.com had to suspend the operation of its VISA card due to the problems related to Wirecard.
It all originated from the bankruptcy of the German fintech company Wirecard.
Following the bankruptcy which occurred in the past few days, the UK Financial Conduct Authority (FCA) had to revoke the authorization to operate from Wirecard Card Solutions Limited, a subsidiary of Wirecard regulated by the same FCA which issues Crypto.com’s VISA cards.
The FCA has stipulated that Wirecard Card Solutions may no longer hold any assets or funds, may not engage in any regulated activity, and must make a statement on its website to its customers that it may no longer engage in regulated activity.
The parent company, Wirecard AG, is based in Germany and is not under the control of the FCA, but its subsidiary Wirecard Card Solutions has offices in Newcastle and operates in the UK.
Crypto.com, after hearing the news, published a post on its official blog in which it takes note of the FCA decision, and reveals that it has received an explicit request to cease all activity on their cards in the UK and Europe.
“Our customers in those two regions will not be able to top-up their cards or transact later today”.
However, they guarantee that customers’ funds are safe, and the team is working on calculating the fiat currency balances they hold on their cards. This process should be completed within 48 hours.
At the same time, they are also looking for a new provider to transfer the company’s entire card program to, as at this point Wirecard Card Solutions may never reopen its operations again.
The CEO of Crypto.com, Kris Marszalek, has stated that all customers owning the cards will be reimbursed, with cryptocurrencies credited to their wallets at a value equal to the fiat currency balances held on the cards.
For now, the price of Crypto.com’s CRO token does not seem to have been affected by this problem, as its price today is in line with yesterday’s price.
It should be noted that from the lows reached at the end of 2019, the price of CRO has almost quadrupled during the first six months of 2020, so it might well be poised to retrace significantly. It seems that the markets are doubtful that the Wirecard problem can actually affect Crypto.com as well.