Why the Wirecard failure is bad for all crypto

3개월 전

Payments

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I was very pleased a few weeks ago when I finally received my crypto.com
Visa card which paid MCO crypto cashback for purchases wherever you see a Visa sign. I had been waiting months for my card so I eagerly went out to use it and tried it out. Brilliant, the crytpo.com team had delivered and this provided another method of accumulating crypto every time I spent money.

I was therefore disappointed on Friday when my card payment was declined. I knew I had funds so I quickly searched to see what might be going on. I find the announcement from crypto.com in my email.

Crypto.com email

crypto.com Email

To be fair to crypto.com, this wasn't their fault and they have saved my funds.

Crypto.Com Tweet

Crypto.com Tweet

They are looking for another Visa card provider and hope to ship again soon.

But what went wrong?

Wirecard recently announced that its auditors, Earnest and Young, had recently found a €1.9bn missing from its funds declared on its balance sheets. The money trail supposedly let to a Philippine's bank account but the trail ran dry and we then saw news that the funds many not exist.

The UK Finance Conduct Authority (FCA) then ordered Wirecard to cease operation in the UK which was why my payment was declined.

So why is this bad for cyrpto?

As David Gerald reports in this great article, most payment processing companies don't want to come anywhere near crypto. We love the idea of spending and earning crypto through regular payment transactions but in reality, the world we live in is rife with fraud. The Wirecard scandal of missing money is likened by David Gerald to the criminal behaviour involved in Tether.

We have a problem promoting cryptocurrency mass adoption if our image is that of fraud and corruption. If reputable payment companies don't want to touch crypto then we risk always being in the niche underground along with criminals and fraudsters.

How do we polish up our public image?

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I was just talking to a friend about it today. There is a general relationship between cryptology and fraud, and as long as that happens it is difficult for more people to take an interest in cryptology.
There is much that has been taken advantage of by others, and they use crypto currencies as a shield to avoid problems, by hiding. But, people must understand sooner or later that this is better than it seems.

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I agree and it is a real shame for organisations like crypto.com who I believe offer a great platform with some really nice products. We need to get past a critical mass of genuine people using crypto to make the criminal element relatively insignificant like it is in other technology.

@awah the fall of any institute related to the cryptocurrency create Chaos in the world of cryptocurrency. And it will give a bad impression on other projects also that they will also fall. But we need to do our due diligence before any investment.

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True, in this case, I do trust crypto.com and to be fair to them they have been quick and transparent in the their communications. Agree that any damage hits all of us.

Also, the situation has improved again today as the FCA as allowed Wirecard to restart their transaction processing.

It is sad that fraudster's are taking advantage of the crypto currency system to loot money, some countries consider crypto currency as fraud and it is no way to make it acceptable soon.

Dear @awah

I've heard about Wirecard issues the other day. However I didn't think that it may affect crypto. Thanks for sharing your thoughts on that particular issue.

ps.
I've never knew about crytpo.com. It's sad to see new businesses being destroyed so fast.

Have a great monday,
Yours, Piotr