Troubled fintech company Wirecard, which powers many of the crypto debit cards on the market, has reportedly filed to open insolvency proceedings.

Equally reported by Wall Street Journal and others, Wirecard filed an application with the Munich district court to begin preparing for insolvency resolution procedures.

The visitor cited its "impending insolvency and over-indebtedness" as motivation for the filing, alluding to the $2.1 billion of its residue sheet that went missing.

Events unfolded rapidly for Wirecard since discovering that 32% of its remainder sheet never existed. The company apace became leaderless every bit the founding CEO and other top executives resigned, with the former subsequently beingness arrested on Tuesday.

Insolvency, but not yet defalcation

Calling for insolvency implies that the company is unable to run across its debt obligations in the curt term, either due to negative cash catamenia or a negative net asset balance. Given the scope of the incident, this appears to be a case of the latter.

Co-ordinate to its latest fiscal filing in 2022, the visitor has a internet income of almost $350 million, though given contempo history, investors may want to have a closer look at the numbers.

During insolvency procedures, companies will by and large enact drastic measures to stay afloat, such as cutting staff and expenses, restructuring debt, selling a portion of its assets and others.

Bankruptcy occurs when the visitor is completely unable to pay its debt obligations. While insolvency is a prerequisite of that, it does not indicate complete failure of the company.

Every bit Cointelegraph previously mentioned, Wirecard is the issuer of many crypto debit cards including those of Crypto.com, Cryptopay, some Wirex cards and TenX.