Fintech company Revolut has announced plans to temporarily suspend certain cryptocurrency services for its business clients in the UK.
This decision from the digital bank comes as a direct response to the new regulatory framework set by the UK’s Financial Conduct Authority (FCA).
An email from Revolut, disclosed by City A.M., revealed that starting from 3 January, 2024, UK customers will no longer be able to purchase cryptocurrencies through the Revolut Business platform.
However, these customers will retain the ability to hold and sell their existing crypto assets. Notably, this change does not affect Revolut’s retail customers.
The fintech giant’s move is a strategic step to align its services with the FCA’s latest requirements, introduced in October. These regulations aim to enhance the overall safety and transparency of crypto investments for consumers.
Revolut to pause crypto purchases
Revolut’s decision to pause these services was to ensure full compliance with the FCA’s new “back end” Direct Offer Financial Promotion (DOFP) rules, which are set to come into full effect on 8 January, 2023.
The digital bank’s new features will include a mandatory 24-hour “cooling off” period for investors and a ban on promotional incentives like “refer a friend” bonuses.
In the email, Revolut said: “These requirements aim to enhance the customer journey and provide additional protection for new and existing investors of crypto assets.”
The company also noted the necessity of adjusting its current Business crypto offerings to meet these new standards.
This is not the first time Revolut has had to modify its crypto services due to regulatory changes. The company previously suspended its crypto activities in the US amidst regulatory uncertainties.
New FCA rules change the UK’s crypto industry
The FCA’s new promotional rules have significantly impacted the cryptocurrency industry in the UK. Since their implementation in October, numerous crypto firms have had to either modify or withdraw their services to comply with these regulations.
The rules, which were open to a three-month extension for compliance, mandate that crypto advertisements, including those involving influencers or memes, be clear, fair, and devoid of misleading incentives.
The regulations also included bans on incentives considered inappropriate for the financial market.
This has led to major industry players like crypto exchange Bybit and payments giant PayPal withdrawing certain services from the UK market.
Luno, another significant player, opted to restrict some of its clients from investing in cryptocurrencies through its platform.
The FCA’s stringent stance has also affected Binance, the world’s largest cryptocurrency exchange. Following the FCA’s intervention regarding Binance’s application for compliance in the UK, the exchange announced it would stop accepting new customers from the country.