Neobank Revolut dumps Paxos in favor of new crypto provider

The US arm of the digital banking platform is switching its main cryptocurrency service provider, according to two sources familiar with the matter.

Revolut is tapping Chicago-based Apex Crypto, the sources said, and moving away from Paxos. The change will come into effect at the beginning of September.

An email circulated to customers on Tuesday and confirmed by Blockworks details how Revolut intends to migrate from New York State Department of Financial Services-licensed crypto firm Paxos in early September.

Revolut later sent out an email to customers confirming the custody change, saying that assets will be transferred on-chain. Disruption in crypto trading is expected to last a few hours during the day, per email.

It ends a more than two-year partnership with Paxos, which paved the way for the app to offer crypto to US-based customers, initially with bitcoin and ether. New York-headquartered Paxos is a financial institution and technology firm that includes cryptobroking, asset tokenization and settlement services.

Revolut, a financial super app serving 15 million customers in 29 countries, launched in the US in March 2020.

“We are excited to partner with Apex Crypto LLC to provide broader and better access to crypto for you and the Revolut community,” Revolut wrote in the email.

Representatives for all three companies declined to comment.

The company is competing to add another 25 tokens to the platform, bringing the total to 100, following the migration to Apex. Apex is a broker-dealer offering execution, settlement and custody as a service via its turnkey solutions platform.

Revolut also said it would eventually enable crypto withdrawals, deposits and wagers “in the near future.” Users can currently buy, hold, sell and transfer crypto peer-to-peer through the app.

Crypto peer-to-peer transfers will be temporarily halted during and after the migration until further notice, the neobank said.

“This was a tough decision, but one we had to take as a precautionary measure to ensure the process is completed successfully,” Revolut said in its email regarding peer-to-peer transfers. “We are working hard to enable this function again in the near future.”

Purchases of Polygon (MATIC) for New York State residents will be temporarily disabled after the migration to comply with local regulations.

Users will be allowed to opt out of the migration process by closing their positions and liquidating their assets at current market prices by giving Paxos permission to do so.

During the migration, customers will not be able to buy or sell their digital assets while the crypto part of the app remains hidden. Account balances remain unaffected, according to the email.

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