Once valued at $28 billion, Wirecard declared insolvency in 2020 after the payment firm was forced to admit the absence of 1.9 billion euros in its accounts, which probably never existed. Its case marked the biggest fraud scandal in Germany since WWII.
Interestingly, the OpenPayd co-founder’s potential connections is not the only time Wirecard appears in Crypto.com’s orbit.
Card Issuer Suspected of Money Laundering
The Central Bank of Lithuania, the same one that suspended the services of Transactive Systems less than a month ago, made another similar move on February 9, 2023.
Supported by the court’s permission, Lithuania’s Central Bank ordered electronic money institution (EMI) Payrnet UAB to freeze services that involve digital money transactions temporarily.
The bank suspects Payrnet UAB of severe and systematic violations of the Law on Prevention of Money Laundering and Terrorist Financing.
As the local registry shows, Payrnet UAB links its online presence to PayrNet, the subsidiary company of Railsr. Railsr is a UK-registered “embedded finance” platform offering banking-as-a-service and cards-as-a-service solutions for global businesses.
Formerly known as Railsbank, the company acquired the United Kingdom subsidiary of Wirecard in 2020.
The same year, it partnered with Crypto.com.
Kris Marszalek, CEO of Crypto.com, talks about joint card partnership programs for clients in Asia and Europe in this video.
In September 2020, Crypto.com notified its customers that Payrnet Ltd replaced Wirecard and became the new issuer of card programs in the UK and European Union.
Since then, the company has not issued any publicly available announcement stating that it no longer cooperates with Payrnet or Railsr.
On the contrary, the September 5, 2022 document update states that Crypto.com is still in partnership with Payrnet’s Singaporean subsidiary PayrNet Pte. Ltd.
The latter issues prepaid Visa cards for Crypto.com service users. It is also named a holder of fiat currency deposited on prepaid cards or prepaid card wallets.
However, the update from last year says that PayrNet Pte. Ltd. “is not an approved holder regulated by the Monetary Authority of Singapore” and advises users to read the terms carefully.
Furthermore, sources familiar with the matter hint that Railsr has been suffering “an acute cash flow issue in the second half of 2022” and might be talking about selling the firm to Nigerian fintech Flutterwave.
DailyCoin could not detect similar documents related to Crypto.com UK or its European clients at this time.
Neither have we heard of Crypto.com informing its UK and European Union users of the Bank of Lithuania’s actions against the card issuer Payrnet since February 9, 2023.
Crypto.com presents itself as the world’s fastest and most secure crypto exchange, trusted by more than 80 million users in 90 different countries.
It generated over $1 billion in revenue over the past few years, each in 2021 and 2022. The official website says it is “a leader in compliance and security certifications.” CEO Kris Marszalek has named Crypto.com a responsible, regulated player since its inception in 2016.
However, statements and goals have not protected the company from “accidents.” Crypto.com transferred $10.5 million instead of $100 to an Australian woman in 2021, noticing its mistake only seven months after.
In 2022 it accidentally transferred $400 million worth of Ethereum (ETH) to rival crypto exchange Gate.io, blaming human error.
Digital Asset Exchange published its Proof of Reserves audit report in December 2022. The audit, conducted by Mazars Group auditors, stated that crypto exchange customers’ assets were more than 100% backed.
