The harsh stance taken by the US government against the crypto industry has forced Unbanked, a platform that provides blockchain-powered financial access, to exit the market. The crypto fintech firm announced on May 25 that it would be shutting down its cryptocurrency services due to regulatory pressure from the US government, expressing disappointment in the outcome of its efforts to establish itself in the US market over the past five years.
The co-founders of Unbanked, Ian Kane and Daniel Gouldman, revealed that when they embarked on their venture in 2018, they believed that building the company within the United States would yield long-term benefits. However, the regulatory landscape proved to be more challenging than anticipated.
Today, we are making the unfortunate decision to wind down Unbanked.
Please withdraw your funds (crypto + USD) as soon as possible from your accounts.
More details are available here: https://t.co/oWR7m3ZqlM
— Unbanked (@UnbankedHQ) May 25, 2023
Regulatory Pressure Forces Unbanked to Cease Crypto Services
The company attributed its closure primarily to the strict regulations imposed by US regulators. Unbanked expressed frustration, stating that even when they diligently adhered to regulations, the government actively hindered banks and fintech companies from supporting cryptocurrencies.
Unbanked’s ability to secure capital was severely limited as a result of these regulatory measures.
Meanwhile, in a recent development, Unbanked signed a term sheet for a $5 million investment with a valuation of $20 million. Despite this positive step, the funds had not been received by Unbanked at the time of the announcement. The investment was intended to fuel the expansion of the company’s operations, and if the funds do materialize, Unbanked has expressed its intention to resume its services. It said,
“We are still optimistic that we will receive these funds; if we do, Unbanked will resume operations and will be stronger than ever.”
Customers Urged to Withdraw Funds Amid Shutdown
However, the firm has urged its customers to withdraw their cryptocurrency and US dollar balances without delay, providing a 30-day window for withdrawals. Notably, Unbanked did not say whether it intended to file for bankruptcy.
Unbanked’s closure aligns it with other recent cryptocurrency service failures, including Hotbit, a cryptocurrency exchange, and TradeBlock, an institutional trading subsidiary of Digital Currency Group.
Unbanked’s closure is an unfortunate outcome after five years of operation, during which it raised $4 million from approximately 6,000 individual investors. The company acknowledges the disappointment this news brings to its supporters and expresses gratitude to its team for their unwavering dedication and efforts.
While the decision to wind down Unbanked was not taken lightly, the company’s founders remain hopeful that either Unbanked can be revived in the future or another company, with better funding, can continue the core mission they envisioned. In the meantime, they extend their thanks to all who have supported the company throughout its journey.