In brief
- Debit cards of Crypto.com and TenX customers have been frozen for use in the UK and Europe.
- The sudden freeze occurred due to the Wirecard scandal. The company allegedly lied to auditors over $2.1 billion of its funds. It has since filed for insolvency.
- The companies say that customer funds are safe and held with a separate bank.
Customers of TenX and Crypto.com can no longer use their crypto debit cards in the UK and Europe, announced the companies in statements today.
The abrupt freeze occurred because the company that powers them, Wirecard, filed for insolvency today over allegations that it lied to auditors over $2.1 billion of its funds. Its auditors, Ernst & Young, failed to ask for the records for three years, reported the Financial Times.
Wirecard now says those funds probably do “not exist,” and that it misled investors about how it made its profits. Wirecard’s former CEO, Dr. Markus Braun, handed himself over to German authorities earlier this week, charged with market manipulation and false accounting.
Due to its insolvency, UK and European customers of Crypto.com and TenX are not allowed to use their crypto debit cards.
“Our customers in those two regions will not be able to top-up their cards or transact later today,” said Crypto.com in a statement.
“Our customers will no longer be able to use their cards or purchase bitcoin using credit/debit cards through the app. This will likely take effect in the next 24 hours,” said TenX in its statement.
Customer funds, however, are safe. The UK’s financial regulators made sure that the money was insured and held with a separate bank.
“You can continue to store, send, and receive cryptocurrency at any time with no interruption. The safety of your funds is our top priority,” said TenX.
Crypto.com said that the team is working on “processing credits to the crypto wallets equivalent to the fiat balances held on the cards.” It expects to finish this within the next two days.
Crypto.com is also trying to find a new provider for its crypto debit cards so it can keep issuing them in the UK and Europe.
Crypto.com also offers crypto debit cards in the US and in Singapore. Though its US cards are issued by Metropolitan Commercial Bank, its Singaporean cards are issued by Wirecard’s Singaporean subsidiary, Wirecard Singapore.
Singapore has not yet prevented Crypto.com from issuing cards, but its financial authorities have instructed Wirecards to keep funds in local banks, reported Reuters.