This Tuesday, TechFinancials released interim financial results for the first half of 2018. The financial technology firm reported a downturn in profits as it attempts to reshape its business in the wake of bans on binary options trading.
TechFinancials was previously owner of binary options broker, OptionFair. In February of this year, the firm returned its license for the business to the Cyprus Securities and Exchange Commission (CySEC).
Its other major business, liquidity provider MarketFinancials, also ceased operations in the past year. The firm noted that many of its clients had “ceased operations due to their inability to comply with new regulations.”
In February of this year, a deal fell through that would have enabled TechFinancials to sell MarketFinancials. This happened after the proposed buyer was unable to get regulatory approval from CySEC. As a result, Techfinancials is still trying to sell the firm.
Blockchain Revenues up for Techfinancials
Despite the turmoil that binary options bans have caused for the firm, there is still some light at the end of the tunnel. TechFinancials has decided to pursue opportunities in the blockchain industry and these efforts seem to be paying off.
Whereas last year the firm had no income from its blockchain service offering, this year revenue totaled $1.23 million. That inflow of cash seems to have largely come from diamond trading firm CEDEX.
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As reported by Finance Magnates, TechFinancials now has a two percent stake in CEDEX. That stake cost the firm $200,000 in late 2017 and also means they have an option to acquire an additional 90 percent of CEDEX.
Growth in the firm’s blockchain business, as well as a huge decline in its other business operations, meant TechFinancials finished the first half of this year with $3.78 million in revenue.
This was 46 percent less than last year when the firm had a total revenue of $6.97 million in the first half of the year.
Unfortunately for the firm, a combination of sales costs and research expenses meant TechFinancials finished the first half of this year with an operating loss of $853,000.
That didn’t mean that the firm finished the first half of the year with losses. According to the firm’s accounts, the option in CEDEX is valued at $9.48 million.
With losses of $853,000 and a tax expense of $24,000, this meant TechFinancials finished the first half of the year with just under $8.5 million in profit.