Is Revolut facing regulatory challenges in the UK? Despite earning £1.9 billion this year, the company is yet to obtain a banking license in the United Kingdom.
Revolut, a UK-based fintech startup founded in 2015, launched its bitcoin trading, custody, and transfer services in 2017. It currently offers trading and transfer services for over 30 types of tokens. However, since announcing in August that it would no longer provide cryptocurrency services to US users, it has also temporarily suspended purchases of cryptocurrencies by UK corporate customers. Bloomberg reported that its revenue is expected to increase significantly in 2023, but there seems to be no sign of progress in its application for a UK banking license.
According to The Block, Revolut’s UK corporate customers can no longer purchase new digital assets but can still hold or sell cryptocurrencies. Revolut is “pausing the service to have more time to adapt to the new requirements set by the Financial Conduct Authority in October.” Retail customers are currently unaffected.
In an email, Revolut stated: “The purpose of this move is to enhance the customer journey and provide additional protection for both new and existing investors in cryptocurrencies. We need to adjust our existing business cryptocurrency products to ensure that all new requirements are met.”
Revolut announced in August that it would no longer provide cryptocurrency services to US users, citing the challenges of the US regulatory environment. According to Bloomberg, Revolut’s revenue is expected to reach $1.9 billion this year, far exceeding last year’s $1 billion.
This startup was valued at $33 billion in its most recent funding round in 2021 but has yet to receive a banking license from UK regulators. It was previously found by the UK Financial Reporting Council to have deficiencies in its audits and a high risk of misreporting, putting pressure on Revolut to improve its internal financial reporting controls. Revolut is expected to release its audited financial statements for 2022 in the near future, but it is already several months past the deadline.
Earlier this year, interest income generated by Revolut’s operations across Europe was three times its foreign exchange income. Cryptocurrency activities had been a boon for the company in 2021 but have now declined to less than 5% of the platform’s total volume.
Financial technology consultant Meaghan Johnson stated, “If they ultimately overcome the regulatory challenges in the UK (referring to the banking license), it will open up many new product areas for them to explore in depth.”
Revolut
UK
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