Bri­tons re­gain ac­cess to fin­tech ac­counts as City reg­u­la­tor lifts freeze on Wire­card unit

The Daily Telegraph - Business - - Business -

By Michael O’Dwyer AC­TIV­ITY on Wire­card ac­counts surged to three times their usual level yes­ter­day as Bri­tish con­sumers re­gained ac­cess af­ter the City reg­u­la­tor lifted a freeze im­posed last Fri­day to pre­vent cus­tomers’ money be­ing dis­posed of by the firm.

The freeze had left hun­dreds of thou­sands of users of providers in­clud­ing FairFX, Pockit and sub­prime lender Morses Club’s U Ac­count un­able to ac­cess their money over the week­end and into Mon­day night.

Re­struc­tur­ing ex­perts at Al­varez & Marsal are still ex­plor­ing op­tions for Wire­card’s UK busi­ness af­ter its Ger­man par­ent filed for in­sol­vency amid an ac­count­ing scan­dal.

The Fi­nan­cial Con­duct Au­thor­ity said: “We know some cus­tomers have faced dif­fi­cul­ties over the week­end but the steps we took were the right ones to pro­tect ev­ery­one’s money.”

The un­freez­ing of the ac­counts trig­gered an in­crease in trans­ac­tion lev­els but a per­son close to New­cas­tle-based Wire­card UK said that cus­tomers were adding money to their ac­counts more of­ten than usual as well as mak­ing more with­drawals.

Some providers had en­cour­aged cus­tomers to hastily with­draw their cash be­fore ac­counts were frozen on Fri­day, spark­ing fears of a “run” on ac­counts when they were un­locked.

Pay­ments firms could be hit with new rules to shore up weak­nesses in the sec­tor ex­posed by the in­sol­vency of Ger­many’s Wire­card. Agustin Carstens, pres­i­dent of the Bank for

In­ter­na­tional Set­tle­ments (BIS), said a more joined up ap­proach may be needed to reg­u­late the sec­tor, which has grown to in­clude fin­tech firms op­er­at­ing through mo­bile apps.

Mr Carstens, whose or­gan­i­sa­tion acts as a bank for cen­tral banks, said it was too early to tell if tighter rules were the an­swer and that cap­tur­ing pay­ments firms that are not banks would be a key chal­lenge. Shares in Wire­card AG, the

Ger­man par­ent com­pany, briefly ex­ceeded €9 (£8.22) be­fore fall­ing back. The shares were worth more than €100 be­fore the firm re­vealed that it could not ac­count for €1.9bn of cash on its bal­ance sheet and ad­mit­ted that the money prob­a­bly doesn’t ex­ist.

Wire­card’s staff in Ger­many still have not been paid their salaries for June, which should have been paid by last Fri­day, ac­cord­ing to re­ports.

It came as a lawyers filed a crim­i­nal com­plaint in Aus­tria against Markus Braun, Wire­card’s former boss, and Jan Marsalek, former chief op­er­at­ing of­fi­cer, ac­cus­ing them of mar­ket ma­nip­u­la­tion and se­ri­ous fraud.

Mr Braun was ar­rested by Ger­man po­lice last week be­fore be­ing re­leased on €5m bail.

Wire­card de­clined to com­ment.

Lawyers have filed a crim­i­nal com­plaint in Aus­tria against Markus Braun, Wire­card’s former chief ex­ec­u­tive

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