TechFinancials, a UK trading technology provider, is shutting down all its B2B brokerage business before the end of this year in a move that the company attributed to weak revenues and “continuing regulatory challenges.” The decision taken by its Board of Directors comes a few months after TechFinancials Inc left London’s AIM market, saying the costs of maintaining its listing there are “disproportionate to the benefits.”
The company has given its licensees a six months termination notice and has scheduled the date to cease the whole B2B business for November 1, 2020. Those whose licenses expire before this date will be unable to renew their contracts.
Furthermore, TechFinancials said in the same filing to the London Stock Exchange that it has fully acquired Blockchain ticketing venture Footies Ltd. TechFinancials has already been Footies’ majority stakeholder since 2018. Now, the tech provider, while downsizing its brokerage business, has hiked its stake in Footies from 82.5 percent to 100 pence without paying a penny.
Footies offers a blockchain-based solution to event owners, starting with sports clubs, allowing them to set the price range that, for example, their ticket can be re-sold on its proprietary, white-labeled secondary platform.
The statement further explains: “The company has signed a separation agreement with Footies.Tech (the Co-founders of Footies Ltd.) in which TechFinancials shall purchase from Footies.Tech all of the Footies.Tech Shares (the “Purchased Shares”) at no cost. In return Footies.Tech will receive the basic source code of the Footies Ltd. as it existed on May 31 2019. The ownership in the Basic Source Code will be jointly owned by the Company and Footies.Tech.”
Survival attempts have all been for naught
The former AIM-traded firm revealed last year it had agreed to sell its holdings in subsidiary MarketFinancials to a Cyprus-based company called Proverial for €100,000.
At the time, TechFinancials flagged that it intended to sell the business because its operations are no longer core to its future business strategy following the decision to step away from B2C operations in Europe.
The company was also part of TechFinancials’ plans to sell its Cyprus-based business, BO. Tradefinancials (BOT), as the company moved away from the binary options industry, ceased its operation and returned its license to CySEC.
TechFinancials has been retooling over the last two years, parting ways with key executives, restructuring the company, and reassigning and laying off workers, but it seems to have all been for naught.
The firm has also been 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.
It will be interesting to see if this is part of a broader trend. Presently, other venues such as XCritical have been strengthening their business by marketing themselves as cheaper alternatives.