Digital finance companies are trying to reassure customers about their cryptocurrency offerings after the implosion of crypto exchange FTX.
Revolut Ltd., a finance app based in London, told users this week it did not have “material exposures” to FTX but was monitoring the situation. “This is a good reminder that crypto is very volatile: the value does go down, as well as up,” it said in an email. “So, remember to only invest what you can afford to lose.”
Last year, FTX Chief Executive Officer Sam Bankman-Fried tweeted that users could transfer money in fiat currencies between his exchange and Revolut.
However, a Revolut spokesperson said the company does not have any direct exposure to FTX.com or its associated trading house, Alameda Research. Revolut has very little indirect exposure and does not facilitate trading in the digital currency that FTX created, known as FTT, according to an emailed statement.
FTX’s bankruptcy filing last week has rocked the crypto markets and caught the attention of regulators globally. It’s also the latest headwind for fintech companies that have grown rapidly in tandem with the surge in digital asset trading.
For Revolut, crypto has already shrunk from about 35% of its revenue last year to less than 5% this year, suffering as the Bitcoin market lost most of its value. CEO Nik Storonsky remains committed to expanding in the space, this year gaining permission from UK regulators to operate a crypto business and enabling users to pay for any purchase in digital currencies.
It’s a similar story for Block Inc.’s Cash App, which allows consumers to transfer money or buy stocks and cryptocurrencies. The San Francisco-based company, formerly known as Square, said in a statement it was “Bitcoin-first” and committed to a “truly” decentralized payments system “not controlled by any person, bank, country, or corporation.”
“We do not offer any crypto lending products, or futures trading, options, or other derivatives,” Block said in the statement.
Online trading firm IG Group Holdings Plc confirmed it never had a trading or custodial relationship with FTX or any of its affiliates. In a series of tweets, Robinhood Markets Inc. Chief Executive Officer Vlad Tenev said his firm had no direct exposure to FTX and customers were turning to his trading app in a “flight to safety.”
Public, the New York-based investing platform that offers over 25 cryptocurrencies, is sending a note to its members this week that will say it does not have “any direct exposure” to FTX, Alameda or FTT.