Wirecard transactions suspended by FCA

The UK’s Financial Conduct Authority (FCA) has implemented a host of restrictions on embattled Wirecard AG, following the digital payment processing firm’s decision to file for insolvency in its home market of Germany.

The FCA detailed that Wirecard UK must cease any regulated market activities, with the financial services regulatory body emphasising that Wirecard is restricted from disposing of any assets and funds during its period of investigation.

Wirecard UK has been instructed to communicate the FCA’s restrictions to users of its services and client partners, explaining that it can no longer carry out UK regulated e-money and payment processing services.

In its statement, the FCA underlined that its restrictions have been imposed to protect the digital funds of UK consumers during the period that Wirecard AG is being investigated for fraud charges of €1.9 billion.

Wirecard UK will be allowed to process fund withdrawals from its users, merchants and clients on the behest of their instructions, with transactions overseen by the FCA.

The FCA has also mapped out further guidance for Wirecard clients who have stored funds with the firm’s ‘agents’ based in the European Economic Area (EEA) and abroad. The FCA stated that funds with Wirecard agents will not be protected under the Financial Services Compensation Scheme (FSCS).

A tumultuous week has seen Wirecard AG apply to German courts for insolvency, following the firm’s board and executive team admitting to falsifying €1.9 billion of corporate accounts primarily related to Asian market activities.  

The news comes just days after Markus Braun, the ousted Chief Executive of the global payment processing firm, was arrested on charges of corruption, fraud and executive mismanagement.