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With the new law set to take effect next year, Revolut has temporarily paused its crypto services to ensure compliance with these new requirements.
Revolut, a prominent financial technology company providing online banking services, has temporarily suspended crypto services for customers in the United Kingdom.
Starting January 3, 2024, digital asset traders in the region will no longer have access to Revolut’s business platform. However, it’s worth noting that an email notifying customers of this decision specifically addressed purchasing, leaving room for customers to continue selling and storing their crypto holdings on the platform without restrictions.
Adapting to Regulatory Changes
The neobank explained that the decision is part of its strategy to better prepare for the upcoming advertising rules scheduled for implementation on January 8, 2024. The UK’s financial watchdog, the Financial Conduct Authority (FCA), recently strengthened its ad laws for promoting digital assets.
Under the new law, crypto companies must include a “cooling-off period” for first-time investors. These companies must ensure that investors know the risks associated with digital assets before selling their products. The legislation also prohibits firms from using “refer a friend” bonuses to attract new users.
With the new law set to take effect next year, Revolut has temporarily paused its crypto services to ensure compliance with these new requirements.
“We’ll need to adjust our current business crypto offering to make sure all of the new requirements are met,” the company said.
The online banking company entered the British market last year after obtaining approval from the FCA to offer digital asset services to customers in the UK.
Industry-wide Impact
Revolut is one of many companies affected by these new advertising rules.
In September this year, crypto exchange Bybit announced its exit from the British market, citing new advertising laws. The company gave users until October 8 to withdraw their funds from the platform. Binance, another exchange, ceased onboarding new users from the region after its compliance partner, Rebuildoingsociety.com, violated the incoming advertising rules.
In June, the company withdrew its application to register as a digital asset service provider in the United Kingdom. With the withdrawal, the exchange has been banned from servicing its clients in the region.
Solana-based decentralized protocol Marinade Finance also joined the trend, prohibiting UK residents from accessing the platform due to the rule changes. PayPal also temporarily halted crypto purchases for UK customers, citing toughened advertising rules for digital asset products and services.
Meanwhile, since the introduction of the rules, which the FCA described as stringent, the regulator has recorded dozens of violations. In September, authorities observed low engagement from crypto companies in the region due to compliance issues with the new rule. By October 25, the FCA had recorded over 200 breaches of the regulations, issuing additional guidance on the laws in November.
Initially designed to become effective in October, the new advertising changes were postponed until next year due to a lack of compliance, providing advertisers ample time to align themselves and their product offerings with the incoming rules.