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Revolut Pauses U.S. Cryptocurrency Services Amid Regulatory Uncertainties

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UK-based financial technology company, Revolut, has confirmed it will halt its cryptocurrency operations in the United States due to the challenging regulatory environment. The suspension, fueled by the unpredictable nature of the U.S. crypto market and evolving regulatory measures, is slated to commence on September 2, 2023.

On this day, the capacity for U.S. customers to initiate cryptocurrency purchase orders on Revolut’s platform will be eliminated. A representative from Revolut stated that, “While we are seeking other ways to continue providing crypto services, our operations are currently on hold. We hope to reintroduce crypto offerings in the United States in the future.”

We regret to inform you that our cryptocurrency services in the U.S. will be closing down.

This initial measure will lead into a broader prohibition beginning October 3, 2023. From this date, U.S. customers’ access to cryptocurrencies via Revolut will be completely blocked. Consequently, these clients will be unable to purchase, hold, or sell any cryptocurrencies. The representative expressed, “Given the fluid regulatory climate and unpredictability surrounding the U.S. crypto market, we, in consultation with our U.S. banking partner, made the tough choice to stop providing access to cryptocurrencies via Revolut in the U.S. We didn’t take this decision lightly and recognize the potential disappointment it might cause.”

Revolut has notified all U.S. crypto customers about this decision via email. The email read, “We regret to inform you that our cryptocurrency services in the U.S. will be closing down.”

SEC’s Crackdown on Crypto

Cryptocurrency regulations have been a key factor in this decision. The Securities and Exchange Commisson (SEC) has maintained that the majority of cryptocurrencies are securities and are thus subject to investor protection rules. This stance was reinforced in early June when the SEC sued cryptocurrency exchanges Coinbase and Binance for failing to register several cryptocurrencies. Both entities have denied these claims.

SEC has gone after a number of other crypto companies, in an effort some have referred to as “Operation Choke Point 2.0“. This has been widely criticized for having the unintended (or, some say, intended) result of driving the crypto sector out of the United States and into other countries that will profit from it. Already, some major centers such as Hong Kong have been gradually transforming themselves into veritable “crypto hubs” and have begun to attract business there.

The chair of the Securities and Exchange Commission, Gary Gensler, believes the crypto industry is “a field rife with fraud, rife with hucksters.” This development brought yet more criticism of the SEC and the US regulatory landscape. An Twitter user wrote, “The SEC is just scamming all US citizens out of crypto participation”:

In response to the SEC’s assertions, Revolut promptly decided to delist Cardano (ADA), Solana (SOL), and Polygon (MATIC). The SEC had classified these three tokens as securities, likely influencing Revolut’s decision. The platform has set a completion date of September 18 for this delisting process.

Many crypto companies, naturally, have opposed the SEC’s jurisdiction, lobbying Congress to enact laws stating that cryptocurrencies are closer to commodities than securities. There have been a number of bills to be passed that have been debated recently, but how effective they will be is something that remains to be seen. The DeFi exchange sector outside of the U.S. may benefit if the internal regulatory environment becomes too harsh.

Revolut’s decision will not impact its operations outside the U.S. “Our customers in all other markets can continue to sign up and enjoy our crypto services,” the spokesperson stated. Apart from the U.S., Revolut’s crypto services remain operational and are expanding, particularly in Europe. Earlier in February, the company unveiled a staking program that enables customers in the UK and nearly 30 European nations to earn cryptocurrency rewards.

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