Due to continuing regulatory challenges, TechFinancials, Inc announced this Monday that it has closed DragonFinancials, its business-to-consumer (B2C) trading platform focused on the Asia Pacific region.
According to the statement filed through the London Stock Exchange, DragonFinancials, of which the company owns 51 percent, has not been able to withstand the current regulatory environment and has been consistently incurring losses since 2018.
“As prospects for DragonFinancials have not improved in H2 2019, in conjunction with its joint-venture partners at DragonFinancials, the Company has decided to close DragonFinancials with immediate effect in order to stem further losses. Consequently, the Company will no longer operate any B2C business in its traditional systems unit,” the company said.
Over the past three years, TechFinancials has been struggling with remaining competitive in an increasingly challenging regulatory environment. Although the company has tried to diversify into other product areas such as foreign exchange (forex) and contracts for differences (CFDs), this has been met with limited success, the company said.
DeFi Startup Acala to Restructure Oracle Network — For the BetterGo to article >>
As Finance Magnates reported, for the company’s financial year ended December 31, 2018, trading platform revenues were $2.7 million. When measuring this against the $8.9 million revenues achieved in the previous year, 2018’s result was lower by 70 percent.
TechFinancials will continue to support B2B division
At the moment, TechFinancials is continuing to support customers of its B2B division. However, this unit is also feeling the weight of declining revenues, which will be made worse after losing DragonFinancials revenues. Therefore, the financial trading solutions provider will make a decision regarding the viability of its remaining B2B business in due course.
Following the closure of DragonFinancials, which is effective immediately, the company is seeking to cancel its listing on the AIM Market of the London Stock Exchange, and instead, solely be listed on the NEX Exchange Growth Market.
“The TechFinancials board considers that NEX is a more appropriate market given TechFinancials’ currently reduced size and its focus on new business streams. A sole listing on NEX would also result in a reduction in total listing costs.
“Consequently, the Board has concluded that the cancellation of admission of its Ordinary Shares to trading on AIM (the “Cancellation”) is in the best interests of the Company and its Shareholders as a whole.”