German fintech company Wirecard has gone into insolvency after the discovery of $3.1 billion (€1.9 billion) missing from its books.

Accounting firm EY announced this month that it had not been able to locate $3.1 billion in Wirecard’s accounts, suggesting that “spurious or falsified balance confirmations” had been given on the German tech firm’s books.

“There are clear indications that this was an elaborate and sophisticated fraud involving multiple parties around the world in different institutions with a deliberate aim of deception,” EY said in a statement.

Founded in 1999, Wirecard processes tens of billions of dollars’ worth of transactions yearly and is listed on Germany’s blue-chip stock market index, the DAX.

Wirecard’s stock market rise has come off the back of its supposedly high revenue which was thrown into question by the recent revelations.

Wirecard initially said the money was sitting in two banks in the Philippines, but the banks said they had never seen the missing billions.

Wirecard’s CEO, Marcus Braun was arrested in Munich last week for his role in the fraud. He soon posted the $8 million bail bond.

Braun led Wirecard from its early days conducting transactions for gambling and pornographic websites into becoming one of Germany’s hottest stocks.

He resigned from CEO as the scandal escalated, admitting responsibility for the billions in missing money.

“The confidence of the capital market in the company I have been managing for 18 years has been deeply shaken,” Braun said in a statement.

“With my decision, I respect the fact that responsibility for all business transactions lies with the CEO.

“As most of you are aware, I, as a shareholder, am also personally and massively affected by the events of the past few days, weeks and months.”

Wirecard’s share price plummeted from $170 in mid-June to just over $2 at the end of trade last week.

Shortly after Wirecard announced its insolvency, German law firm Schirp and Partner began a class action lawsuit on behalf of investors and shareholders.

Since it won’t be able to target the insolvent Wirecard, the lawyers are instead looking to go after its annual auditor, EY.

Lawyer Wolfgang Schirp said the collapse of Wirecard was “foreseeable”.

“It is frightening how long Wirecard AG was able to operate without being objected to by the auditors,” he said.

“We have been monitoring Wirecard AG since 2008 and have collected very extensive material. It was always clear that something was wrong."

Wirecard had been under increasing pressure following a Financial Times investigation last year alleging that the fintech’s meteoric rise had been influenced by fake transactions and dodgy business practices.

The Financial Times report discusses a Wirecard partner intermediary company called Al Alam Solutions that was supposedly processing some $570 million a month for Wirecard’s biggest clients – despite no one having heard of Al Alam Solutions.

In one instance, the Financial Times notes that Al Alam was on Wirecard’s books in 2017 for processing around $75 million on behalf of an Irish company that had been liquidated five years prior.

The German fintech had also been mentioned by name in a recent investigation about an Indian hacker-for-hire operation.

According to researchers at Citizen Lab, the hacker-for-hire group was enlisted to target “short sellers, journalists, and investigators” who were digging into Wirecard’s financials.

Wirecard denied having ever “been in direct or indirect contact with a hacker group from India”.