The UK’s Financial Conduct Authority (FCA) has enforced a number of restrictions on embattled Wirecard AG, following the digital payment processing firm’s decision to file for insolvency in its home market of Germany.
Issuing a regulatory notice, the FCA stated that Wirecard UK can no longer carry any regulated market activities. Furthermore, the financial services regulatory body underlined that Wirecard is restricted from disposing on 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 published 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 frantic 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 th global payment processing firm, was arrested on charges of corruption, fraud and executive mismanagement.
Founded in 1998, Wirecard has built one of the most comprehensive payment processing networks for igaming and sports betting services, utilised by a number of tier-1 operators across regulated European markets.