Monex reports lower revenues as crypto downturn bites

abdelaziz Fathi

Monex Group has reported its Q3 2022 financial metrics, which saw a reversal in terms of its revenues as TradeStation was grappling with a crypto market crash that has tanked the profitability of its crypto business.

For the nine months ending December 2022, Monex disclosed its operating revenues at ¥65.9 billion ($416 million), down 18 percent from ¥65.9 billion in 2021. In terms of its bottom-line metrics, the Tokyo-based financial services giant reported its earnings before interest, taxes, depreciation, and amortization (EBITDA) at ¥8.7 billion ($67.4 million).

Comparing the core profit figure to its 2021 counterpart, the latest EBITDA was also weaker by 61 percent year-over-year from ¥22.8 billion. Blaming the fast and furious crypto downturn, Monex said the lower transaction volume resulted from the unfavorable market condition.

Monex noted that its operating income in the US Segment (TradeStation) has improved significantly since the strategy change in August 2022. The company attributed the improved profitability to cost reduction and the higher financial income driven by the interest rate hike. In addition to the steady earnings of the Japan and US segments, the group anticipates its crypto business to have upside potential when the digital asset market recovers.

“Increased operating income of the online brokerage businesses in Japan and US driven by higher interest rate and favorable forex market. The US dollar cash position held by the holding company Monex Group resulted in a quarterly loss due to the JPY appreciation but the cumulative gain has been recorded for 1-3Q of FYE Mar 2023. The US dollar based cash position are to be unwound,” it said.

TradeStation Crypto, the digital asset-focused subsidiary of TradeStation Group, announced the soft rollout of its services in Puerto Rico back last year. However, the recent results illustrated the stark challenges facing the business at a turbulent moment for the crypto industry.

Tailor-made for crypto traders, TradeStation uses global integrations to create a wide pool of liquidity sources that enable better price discovery and transparency. The company further promotes its crypto desk as helping traders avoid lengthy transactions on traditional exchanges, as well as avoid fees charged by other platforms for instant large volume trades.

The crypto-focused offshoot leverages the brokerage industry expertise of its parent to address what it perceives to be key concerns and certain weaknesses in the current cryptocurrency ecosystem.

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