Unbanked Shuts Down Crypto Services, Says US Regulations Hampered Fundraising

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Unbanked, a cryptocurrency card and trading platform, said on May 25 that it would end its services due to strict US regulations.

Regulations have affected funding

Unbanked cited regulation as the main reason for its closure. The company claimed that regulators in the United States are actively trying to prevent companies (banks and fintechs) from backing crypto assets even when the companies are trying to do so properly and according to good practice and said that these regulatory efforts were limiting its ability to raise capital.

Unbanked said it recently signed a term sheet for a $5 million investment with a $20 million valuation. While he didn’t say what regulations prevented him from receiving the loan, he said he ultimately hasn’t received the funds yet.

The company said the investment would have allowed it to expand its business. He said if he received the funds, he would resume operations.

Unbanked nevertheless advised all its customers to withdraw their cryptocurrency and US dollar balances immediately. The company said it would leave withdrawals open for 30 days, but recommended customers start withdrawals sooner.

The company did not say whether it plans to file for bankruptcy.

Other encryption service failures

Unbanked has been offering crypto card services and trading services since 2017. The company has raised $4 million in its five years in business from approximately 6,000 investors.

This puts Unbanked in the company of other relatively small crypto companies that have closed recently, including retail cryptocurrency exchanges Hotbit and Coinloan and Digital Currency Groups’ institutional trading subsidiary TradeBlock.

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