The German fintech powerhouse Wirecard issued a press release last Saturday to comment on an article published on Friday in the German Handelsblatt about the company’s purported involvement in the vast investment fraud around binary options scheme Option888 allegedly orchestrated by the German Uwe Lenhoff and his group of companies such as Altair Entertainment N.V.
Misleading and false statements
In principle, Wirecard‘s statement was to be welcomed. Unfortunately, it contains misleading and false explanations, which are suitable to sort of trivialize the fraud around Option888. Wirecard, which is required by law and regulation to conduct appropriate KYC and AML checks, claims in its press release that Option888 had a government license to operate its business:
Thus, Wirecard actively terminated the customer relationship with Option888, which had a state license to operate its business and was one of the few licensed binary option service providers that held bank accounts with Wirecard.Wirecard press release issued on May 31, 2019 (translated by FinTelegram)
The sad truth is, however, that the German Uwe Lenhoff and the various operating entities of his option888 scheme such as Altair Entertainment N.V. (Curacao), Capital Force Ltd,
Furthermore, Wirecard claims that the annual sales achieved with Option888 would have amounted to only EUR 40,000.
Wirecard’s total sales from customer relationships over a period of one year amounted to less than 40,000 euros.Wirecard press release issued on May 31, 2019 (translated by FinTelegram)
Assuming that this statement refers to the revenues recorded by Wirecard in its profit and loss account, one can calculate that, depending on the conditions, many hundreds of thousands, if not millions, of euros must have flowed through the accounts of the operators of Option888. It must also be noted that Option888 was only one of several illegal broker schemed of Uwe Lenhoff and his companies. Wirecard says that the business relationship with Option888 would have been terminated due to suspicious transaction patterns.
Wirecard actively terminated the customer relationship with Option888 in 2016 after suspicious transaction patterns were detected on the corresponding bank account.Wirecard press release issued on May 31, 2019 (translated by FinTelegram)
It can only be assumed that Wirecard has fulfilled its regulatory obligations and reported these suspicious transactions to the authorities.
But at least Wirecard has now admitted that, just like Payvision, it was involved in the broker scams as a payment service provider. At least the public discussion of the fraudulent binary options schemes and the involved (fraud facilitating) payment services providers started. Anyway, that’s a good development.
What about GreyMountain Management?
There is still no statement on Wirecard‘s participation in the GreyMountain Management binary options schemes. This GreyMountain Management (GMM) binary options scheme was most likely the single largest one between 2012 and 2017 the company, again, was involved as payment services providers (PSP). The Irish GreyMountain Management Ltd of the Israelis David Cartu and Jonathan Cartu even shared the office address with Wirecard in Dublin and had close personal as well as business relationships with Wirecard UK and Ireland.