Wirecard has reportedly lost $2.1 billion from one of its accounts, with the shares of the company plunging by 62% as investors lose confidence.
1.9 Billion Euros Lost from Wirecard Account
Wirecard, one of the popular cryptocurrency card issuers, has revealed that it has lost around 1.9 billion euros ($2.13 billion) from one of its accounts. The company is yet to account for the money, with this latest development dragging the shares of the company down.
The German payment processing company released a statement, blaming spurious cash balance confirmations that were provided by a third party to deceive the auditors, Ernst and Young. It was the auditors that discovered the scandal while carrying out a routine audit of the company.
According to Wirecard, there are indications that the spurious balance confirmations were provided from the trustee so as to deceive the auditors and to give then a wrong perception of the existence of such a fund balance.
Wirecard, popular within the cryptocurrency sector for issuing cards that support cryptocurrency platforms like crypto.com and Wirex, revealed that it is currently working alongside the auditors to investigate the matter. The amount currently missing is roughly 25% of the company’s balance sheet, which is a huge amount to go missing from any organization.
Declining Share Price
Due to this latest development, Wirecard has revealed that it will be delaying the publication of its annual report and financial statement for 2019. The report was initially slated to be released on August 4. In their statement, Wirecard noted that the audit of the annual report and the consolidated financial statements for last year will not be concluded by June 18 as earlier planned. The company will announce a new date. However, if the certified annual report and consolidated financial statements are not available by June 19, the loans made to Wirecard AG of around EUR 2 billion would be terminated, the company concluded.
Following the press release by Wirecard, the shares of the company tanked by 62% or from 65 euros to 40 euros in Frankfurt on Thursday. The company’s stock is now approaching its low price of 30 euros following the recent development, while its 52-week high price remains around 159 euros.
The cryptocurrency sector has been plagued with security breaches, internal theft, and other negative activities when it comes to user funds over the past few years. This is one of the challenges facing the cryptocurrency sector that needs to be addressed as institutional investors are starting to venture into the new space. The hacking and subsequent stealing of hundreds of millions of dollars from cryptocurrency exchanges like Coincheck, Bithumb, Coinrail, BitGrail, have greatly impacted the general trust on some platforms.
For Wirecard, losing such a huge amount of money will probably do untold damage to the company and the trust of investors. Cryptocurrency enthusiasts and investors will now be watching keenly to see the updated information following the internal audit by Ernst and Young, and Wirecard.