Revolut blames Brexit as it shifts one million trading customers from London to Lithuania – The Telegraph

Revolut has blamed Brexit for forcing it to shift more than one million trading customers from London to Lithuania in order to market its products to European clients.

The fintech company will transfer all European Economic Area (EEA) customers from Revolut Trading Ltd, its UK-based subsidiary, to its Lithuanian business by the end of this year, according to accounts filed at Companies House.

The company did not disclose how many customers will be affected, but it is understood it will shift over one million accounts to its Lithuanian arm.

The fintechs trading business, which allows customers to invest in shares and cryptocurrencies, has become a significant revenue stream for the company in recent years.

In the accounts, Revolut said: Due to legislation introduced after the United Kingdoms departure from the European Union, the company cannot currently offer marketing of its products to its EU based customers.

As a result, the business plans to migrate these customers to Revoluts European licenced trading entity towards the end of 2022.

The accounts also reveal that the City watchdog has yet to grant Revolut a so-called Mifid licence, highlighting the regulatory hurdles it is continuing to face in the UK. The company obtained this licence for its Lithuanian business last year.

It comes as the $33bn (29.5bn) company is still awaiting a decision on its UK banking licence application, which it applied for in January 2021 and is regarded as a key milestone in its development.

Nikolay Storonsky, the companys co-founder and chief executive, previously said that he hoped to secure the licence early in 2022.

The former banker has hit out at the Financial Conduct Authority (FCA) over what he regards as its slow procedures for processing applications, saying it was slower compared to expectations.

Revolut has suffered a turbulent few months, including a series of high profile resignations and faces questions around its auditing and a cyber attack that affected about 50,000 customers.

The accounts show that Revolut Trading Ltd generated revenues of nearly 13m in 2021, an increase of nearly 70pc on the previous year. Pre-tax profits came in at 8.9m for the period.

Last month, in a boost for the company, Revolut was given permanent approval from the FCA to run its cryptocurrency business in the UK, having previously been placed on a temporary register.

Revolut can no longer market trading products to EU clients from the UK as British-based companies were stripped of their passporting rights following the UKs exit from the EU, which gave companies full access to European markets.

The Mifid 2 rulebook was introduced by the EU in 2018 in a bid to reduce conflicts of interest in the financial services industry.

A Revolut spokesman said: "We plan to migrate all EEA-based users of our trading product from Revolut Trading Ltd to Revolut Securities UAB.

This migration will enable us to grow our trading product further in the EEA. Revolut Securities UAB is our investment firm, and Mifid licensed by the Bank of Lithuania."

The FCA declined to comment. m

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Revolut blames Brexit as it shifts one million trading customers from London to Lithuania - The Telegraph