Unbanked shuts down crypto services, says US regulations prevented fundraising

Unbanked, a cryptocurrency card and trading platform, said May 25 that it would be winding down its services due to harsh U.S. regulations.

Regulations affected funding

Unbanked cited regulations as the primary reason for its shutdown. The firm asserted that regulators in the U.S. are “actively trying to stop companies (banks and fintechs) from supporting crypto assets – even when the companies are trying to do it correctly and by the book” and said these regulatory efforts limited its ability to raise capital.

Unbanked said it recently signed a term sheet for a $5 million investment with a $20 million valuation. Though it did not state which regulations prevented it from receiving the loan, it said it ultimately had not received the funds as of yet.

The company said the investment would have allowed it to expand its operations. It said that if it does receive the funds, it will resume operations.

Unbanked nevertheless advised all customers to withdraw their cryptocurrency and U.S. dollar balances immediately. The company said it would leave withdrawals open for 30 days but recommended that customers begin withdrawals sooner.

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

Other crypto service failures

Unbanked has offered crypto card services and trading services since 2017. The company raised $4 million over its five years of operation from about 6,000 investors.

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

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