Wirecard scam may lead to financial company regulation amendment

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Earlier, a “hole” in the amount of $ 2.1 billion was found on the payments company’s accounts

Wirecard scam may lead to financial company regulation amendment

European Union officials said the bankruptcy of German payment firm Wirecard could lead to an amendment in the regulation of financial companies in the European Union.

Earlier this month, the European Commission’s executive vice president, Valdis Dombrowski, announced that the European Securities and Markets Agency (ESMA) would review the European Union’s financial sector regulation.

It is reported that there is currently a “gray area” under the supervision of fintech companies such as Wirecard, which is launched as a non-bank startup, but then obtains licenses to provide banking services.

Wirecard was originally engaged in processing electronic payments, but the bank later converted it into a hybrid structure. In 2008, German bank Wirecard began issuing the company’s prepaid credit cards.

According to Dombrovsky, Esma will consider both the rules governing the activities of banks and fintech companies, and the quality of supervision and compliance with these regulations by regulatory authorities. The review is scheduled to be completed in October this year.

ESMA said in a statement, “Good financial reporting in the capital markets is at the core of investor confidence and the collapse of Wirecard erodes this trust.” “Therefore, it is necessary to assess what happened to help restore investor confidence.”

Earlier, the British newspaper The Times reported that one of MasterCard’s top managers is suspected of involvement in Wirecard’s fraud.

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On June 25, German electronic payment and financial services provider Wirecard filed a claim for bankruptcy. The reason was that a “hole” in the company’s accounts in the amount of $ 2.1 billion was identified. Thus, Wirecard became the first of the blue-chip companies included in Dax, the most important German stock index for bankruptcy. All company accounts are blocked.

Later, several of the company’s top managers, CEO Marcus Brown and CardSystem’s head (Wirecard’s subsidiary) Oliver Bellenhouse, were fired and arrested. Former COO of payments giant Jane Marslake is now on the international wanted list.

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