Wirecard UK: Customer Funds Frozen After FCA Imposes Requirements

The UK's Financial Conduct Authority (FCA) Financial Conduct Authority (FCA) The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol The Financial Conduct Authority (FCA) is the largest financial regulator for all financial markets in the United Kingdom (UK).The UK regulator is responsible for the conduct of firms authorized under the Financial Services and Markets Act 2000. Moreover, the FCA is also responsible for the regulation of behavior in retail and wholesale financial markets, supervision of the trading infrastructure that supports those markets, and the prudential regulation of firms not regulated by the PRA. Its rol Read this Term) announced today it has ordered Wirecard UK to cease all regulated activity after the parent company recently filed for insolvency in Germany.

Wirecard Card Solutions Limited (FRN 900051) is authorized and supervised by the FCA to issue e-money and provide payment services including, issuing e-money onto prepaid cards.

With the Munich-based parent firm entering insolvency proceedings following a multi-year fraud that resulted in a €1.9 billion hole in its balance sheet, the FCA has imposed restrictions on Wirecard UK to freeze all assets and funds until further notice.

"Our primary objective is to protect the interests and money of consumers who use Wirecard," the FCA stated.

Huge accounting fraud

"Following last week's news of €1.9 billion missing from the accounts of the German company, Wirecard, we immediately placed requirements on the firm's UK business so that it should not pay out or reduce any money it holds for its customers except on their instructions. On 26 June, we took additional measures to require the firm to cease all regulated activities in order to further protect customer money. This now means customers money cannot be accessed," the regulator noted.

The action could cause inconveniences for UK Fintech Fintech Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Financial Technology (fintech) is defined as ay technology that is geared towards automating and enhancing the delivery and application of financial services. The origin of the term fintechs can be traced back to the 1990s where it was primarily used as a back-end system technology for renowned financial institutions. However, it has since grown outside the business sector with an increased focus upon consumer services.What Purpose Do Fintechs Serve?The main purpose of fintechs would be to suppl Read this Term firms, which rely on Wirecard services for operational support. These include the likes of Revolut, Pockit, Soldo, Anna Money, and Curve.

The FCA said that firms that outsource some operational functions to Wirecard should contact their relevant Supervision contact to discuss the contingency plans they have in place.