A former fintech star has been engulfed in a massive misconduct case.

The former CEO of German financial technology company Wirecard has been arrested. Prosecutors allege he misrepresented the firm’s finances in an accounting scandal revolving around a missing 1.9 billion euros (A$3.1 billion).

Former CEO Markus Braun resigned after the company said that auditors could not find the money, though Wirecard said it concluded that the money probably does not exist.

Still, an arrest warrant was issued shortly afterwards, leading Mr Braun to turn himself in.

Wirecard AG provides companies with technologies and platforms for cashless payments, and while it was once regarded as a star of the growing financial technology sector, its fortunes began to turn last year when the company became the subject of reports about accounting irregularities in its Asian operations.

Mr Braun is accused of inflating the company’s financial position using false income from other businesses, “possibly in collaboration with further perpetrators,” in order to “portray the company as financially stronger and more attractive for investors and clients,” the prosecutors say.

Mr Braun was arrested on suspicion of incorrect statements of data and market manipulation.

Prosecutor Anne Leiding said the case may expand to include other offences, with investigators still working out how often the incorrect financial statements were used to get bank loans.

Wirecard has also fired its chief operating officer, Jan Marsalek.

German news agency DPA says Mr Marsalek was in charge of overseeing daily operations including in Southeast Asia.

Two Philippine banks are alleged to have held the missing money in Escrow accounts, but they say that they have no dealings with Wirecard.