London – Revolut, the prominent London-based neobank and fintech decacorn, has announced the temporary suspension of its digital currency services for business clients in the United Kingdom. The decision is a proactive response to the upcoming digital asset regulations set by the Financial Conduct Authority (FCA).
In an email sent to its business clientele this week, Revolut informed them of the temporary pause, stating that the ability to purchase cryptocurrency via Revolut Business for all UK business customers will be suspended starting January 3, 2024. The suspension will not affect the ability of business customers to hold and sell digital currencies, and it is important to note that retail customers remain unaffected.
Revolut cited the recent set of regulations implemented by the FCA, which have impacted Virtual Asset Service Providers (VASPs) in the UK. These regulations, effective January 8, 2024 (following a three-month extension from October 8), impose restrictions on marketing and advertising, including the prohibition of ‘refer a friend’ bonuses and the requirement for clear risk warnings. Additional provisions include the introduction of a ‘cooling-off’ period, allowing users to reconsider their purchases made impulsively.
Several VASPs have already opted to suspend their operations in response to these regulations. Bybit, based in Dubai, is implementing a phased approach to its exit from the UK by restricting new user registrations. Luno, an exchange owned by Digital Currency Group, and PayPal both announced restrictions on their services in the UK. Exodus, a popular non-custodial wallet, recently delisted its app in the country.
Revolut clarified that its suspension is temporary and aims to ensure compliance with all the FCA’s Direct Offer Financial Promotion (DOFP) rules. An official statement from the company mentioned, “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,” as reported by City A.M., a London-based news outlet.
As the impact of the FCA’s new policy reverberates throughout the industry, the regulator faces criticism for its perceived shortcomings in policing the financial services space. The UK’s national auditor has accused the FCA of sluggishness and a lack of digital asset expertise, questioning its ability to effectively execute its regulatory role.
