The Cyprus Securities and Exchange Commission (CySEC) confirmed on Tuesday that it has wholly withdrawn the Cyprus Investment Firm (CIF) License of B.O. Tradefinancials Ltd, a subsidiary of TechFinancials (LON:TECH), as of June 25, 2018.
TechFinancials (LON:TECH), a UK-listed trading technology provider for the financial industry, has already announced plans to sell its Cyprus-based business as the company moved away from the binary options industry. TradeFinancials, which first entered the space in 2009, has notified the Cypriot regulator in March of its intention to renounce its CIF authorization.
The move came a few weeks after the CySEC refused to approve the sale of its OptionFair brand to another Cyprus based company called S Win Holdings Ltd, which is held by a group of private investors. The deal was also supposed to divest the firm from its Seychelles-regulated subsidiary MarketFinancials Limited. Since January 2015, MarketFinancials has operated as a liquidity provider, providing binary options and forex market maker services as well as risk management to the group.
At the time, the financial cost of the deal was reported at $400,000.
Bye to the binary options
Despite cementing a leading place within a crowded industry, including going public as the first listed binary options company, TechFinancials has fallen victim to many of the same problems plaguing competitors in the industry. The sector has become fairly saturated and overly competitive while continuing to grapple with toughening regulations. Difficulty breaking into new markets has driven many companies to look for alternatives.
TrustedBrokerz: The Source More Traders Are TrustingGo to article >>
TechFinancials has been retooling throughout 2017, parting ways with COO Jeremy Lange, restructuring the company, and reassigning and laying off workers, but it seems to have all been for naught.
Finance Magnates reported on the firm downsizing in Asia and Israel as part of its restructuring process. It also moved some positions to Ukraine where employment costs are lower. Additionally, all board and senior management team members took a 20 percent salary reduction.
According to its latest annual report, the company will focus on its other variety of products and the more competitive sectors of its business. Still, its exit from the binary options industry was certainly another troubling sign for the sector at large.
So after nearly nine years, TechFinancials has reversed course and finally left the industry that it had hoped to dominate. The company’s binary options division ran into trouble as a result of internal difficulties as well as broader forces affecting the whole industry.
Internally, the company decided to terminate its relationship with 24 option, a leading binary options broker, and its largest software licensee.
Although TechFinancials has been successful in onboarding more new customers over the past years, it’s clear that 24option represented the lion’s share of the group’s platform revenues. The actual percentage was unknown, but TechFinancials often states that it derives a “substantial proportion of such white-label partnerships.”