Fintech Genius Turning into Russian Spy: The Story of Jan Marsalek
Have you heard the name Jan Marsalek? Once at the forefront of Europe’s fintech revolution, Jan Marsalek served as a key executive at Wirecard, one of the continent’s premier financial technology companies. However, Wirecard’s collapse followed the revelation of a multi-billion-dollar fraud scandal, marking a dramatic fall from grace. Marsalek, now exposed as a Russian spy, is now on the run. Today, let’s delve into the story of Jan Marsalek, which spans from online betting to the corridors of intelligence agencies, like a James Bond movie, and discuss its implications for Turkey’s fintech sector.
Founded in Germany in January 1999, just six months after PayPal, Wirecard quickly became a pioneer in the European payment systems sector. During those years, executing payment transactions through banks was notably challenging. Notably, European banks lagged behind their Turkish counterparts in adopting digital transactions, presenting Wirecard with a significant market opportunity. The company’s initial clientele primarily consisted of online betting sites — industries often shunned by traditional banks. It’s important to note that these betting activities are legal in some European countries. The willingness of industries involved in legally ambiguous or outright illegal activities to adopt new technologies underscores a broader trend: innovation often arises out of necessity. The most stringent constraints frequently foster the most groundbreaking innovations. Those curious can investigate how the Colombian mafia once transported cocaine using unmanned mini-submarines.
Jan Marsalek joined Wirecard in 2000 when he was just 20 years old. He was an intelligent, hardworking young man who quickly rose. He enjoyed a luxurious lifestyle, wearing tailor-made Brioni suits and preferring private jets for travel. It’s even said that he once sent his assistant to London by private jet to buy cough syrup. Despite his fast-paced life, he used IV drips and hospital beds to stay functional, which were found in his villa years later. Meanwhile, Wirecard was proliferating. The company started trading on the Frankfurt Stock Exchange in 2005 and entered the DAX index of Germany’s most prominent companies in 2018.
From 2015 onwards, Marsalek began transferring money to his accounts in Singapore through Wirecard’s Dubai subsidiary. As in most places, independent audits are mandatory for payment companies in Germany. However, Ernst & Young’s newly graduated auditors failed to ask the Singapore bank who owned the account, allowing the fraud to reach billions of dollars before detection.
These oddities continued until they caught the attention of a Financial Times reporter. When FT published the story, it faced Wirecard and Germany’s financial regulatory authority, BaFin. BaFin sued FT, accusing it of manipulation for tarnishing the reputation of a licensed financial institution it oversaw. However, FT won the legal battle against both Wirecard and BaFin. The officials responsible for these matters at BaFin and Ernst & Young are no longer in their positions. Wirecard declared bankruptcy in 2000. Many of its executives became informants. The trial is still ongoing in Munich. Jan Marsalek, however, remains at large.
The exciting part came out later. It turned out that Jan Marsalek had been working for Russian intelligence since 2014. He had financed the operations of Russia’s private military company Wagner in Africa through Wirecard and had reported other transactions to the Russians, acting as a spy. Marsalek is reportedly living in Russia under the protection of the intelligence agency.
What lessons can we learn from the Wirecard case? Some may argue, “Fintech is dangerous; it should be eradicated!” However, fintech is a vital tool for the growth of the financial system and for individuals or companies that banks often overlook. Yet, this inclusivity can sometimes extend to illegal activities. In Turkey, we see this in POS usury, illegal betting, and payments for prostitution. When these activities proliferate on a fintech platform, the platform can use the revenue from these illegal activities to offer competitive prices in other areas, rapidly outpacing its competitors. But, as the saying goes, “Bad money drives out good money.” Similarly, bad fintech can drive out good fintech. There’s also the risk of the system being exploited by foreign intelligence agencies. These risks are not exclusive to Turkey; they exist in Germany and beyond. Effective regulation means striking the right balance to foster legitimate fintech development. Turkey’s regulations on the payment sector are exemplary. However, the German case underscores the importance of implementation alongside the rules, providing a reassuring lesson for the fintech industry.
