The explosion of Wirecard’s share price is probably not coincidentally connected with the era of the now banned binary options. Like the Dutch Payvision, the German Wirecard and its subsidiaries were an important payment transaction service provider (PSP) for this fraudulent industry. The U.S. FBI has estimated the damage to retail investors from binary options providers at up to USD 10 billion per year. While retail investors lost billions with binary options PSP’s earned a fortune.
The German Wirecard is known to have been an important PSP player in the binary options industry predominantly powered by Israeli actors. For its participation as PSP in these fraudulent broker schemes, Wirecard was rewarded with both high payment transaction volumes and high profits between 2015 and 2018.
Wirecard‘s bill, however, was paid by cheated retail investors. Binary options have now been banned and trading in CFDs, which is also a popular instrument for scammers, has also been largely restricted in most jurisdictions. In this respect, we can assume that Wirecard will not return to its old growth rates and profits anytime soon. Consequently, the company’s share price and market valuation will most likely not see the old highs again. Let alone the binary options-related lawsuits against participating PSPs.
According to a Financial Time report, Deutsche Bank is the source of a €150m loan to Wirecard’s founder and CEO Markus Braun who had to pledge almost half his Wirecard shares as collateral. The Wirecard shares held by the Austrian Markus Braun give him a 7 percent stake and make him the company’s largest shareholder.
Wirecard’s share price quadrupled from €45 from early 2016 until to more than €191 the end of August 2018 giving the company a market value of €24bn. And it turned Markus Braun into a billionaire. Since Jan 2019, when the Financial Times reported suspicious transactions, Wirecard has lost more than a third of its stock market value. Despite the slump in Wirecard’s shares this year, the