Fintech Wirecard shareholders in Germany are suing Big Four Auditor EY in connection with the scandal now surrounding the company.
Earlier this month, the auditor refused to sign the Fintech financial report for 2019, finding a deficit of 1.9 billion euros (about $ 2.1 billion) in the books.
After discovering EY, German authorities arrested Wirecard (now former) CEO Markus Brown, who has been at the forefront of financial technology for nearly two decades.
Brown was accused of conspiring to inflate the company's assets and represent 32% of Wirecard's assets – $ 2.1 billion out of the required $ 6.5 billion.
According to a June 26 CNBC report, EY stated that “there are clear signs that it was a sophisticated and sophisticated fraud involving numerous parties around the world in various institutions with the intent to cheat.”
The auditor defended his position, arguing that “even the most rigorous and comprehensive audit procedures” would not be able to withstand such “false fraud”.
However, the German Investors Association, Schutzgemeinschaft der Kapitalanleger e. V. (SdK) filed a criminal complaint against three EY auditors – two current and one former – for their alleged role in the accounting scandal.
Encrypted Debit Cards Not Affected by Wirecard
On June 25, Wirecard filed for insolvency. When the extent of the alleged fraud became apparent, the organizers decided to suspend the subsidiary Wirecard Card Solutions Ltd., which was responsible for issuing the company's debit card.
The crash has raised concerns in the cryptocurrency industry as Wirex, TenX and CryptoPay debit cards are among the cards issued by Wirecard.
After the regulators took over, Crypto.com was asked to stop the work of cards from the EU and the UK, but returned all the money from the damaged debit cards to the clients’ cryptocurrency wallets.
The company is currently reportedly working on converting a card program into a new provider.