Revolut, the London-based neobank and fintech decacorn, is suspending its digital currency services for business clients in preparation for upcoming digital asset regulations by the Financial Conduct Authority (FCA).
The company emailed its business clients this week, notifying them that it would “temporarily pause the ability to buy crypto via Revolut Business for all UK Business customers.” It added that the suspension goes into effect on January 3, 2024. The business customers can still hold and sell digital currencies after the suspension, and retail customers are unaffected.
Revolut cited the new raft of regulations by the FCA that have impacted VASPs in the U.K. as the reason behind its services’ suspension in the country. These regulations include restrictions on marketing and advertising where they’ve banned ‘refer a friend’ bonuses and called for clear risk warnings. Other stipulations include affording users a ‘cooling-off’ period under which they can change their mind about their purchases in case they did it on a whim.
These new regulations take effect on January 8, 2024 (after a three-month expansion from October 8), and already, notable VASPs have selected to suspend their operations. Dubai-based Bybit is conducting a phased approach to its U.K. exit, starting with restricting new users.
Luno, a Digital Currency Group-owned exchange, also announced it would be restricting some of its services in the U.K., while PayPal (NASDAQ: PYPL) halted services until next year, but later received the FCA’s nod. Exodus, a popular non-custodial wallet, recently delisted its app in the country.
For Revolut, the suspension is only until it can comply with all the FCA’s Direct Offer Financial Promotion (DOFP) rules, an official told one news outlet.
“These requirements aim to enhance the customer journey and provide additional protection for new and existing investors of crypto assets. As a result, we’ll need to adjust our current Business crypto offering to make sure all of the new requirements are met,” it added in its email to clients, as reported by London-based City A.M.
While the effect of the FCA’s new policy reverberates across the industry, the regulator has been accused of an inability to police the financial services space. According to the U.K.’s national auditor, the regulator drags its feet and lacks digital asset expertise to execute its role.
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