Crypto fintech company Unbanked, which offers crypto custody and payment solutions, has shut down, citing the challenging regulatory landscape for crypto in the United States. In a blog post on May 26, Unbanked’s co-founders, Ian Kane and Daniel Gouldman, explained that when they launched the company, they believed that establishing it in the United States would be a wise long-term decision. However, after five years, this has not proven to be the case.
“While other crypto companies grew rapidly off-shore by avoiding strict regulation, we believed that engaging with regulators and following their arduous processes would ultimately position Unbanked to come out ahead,” said the execs.
Instead, this decision led to “a lot of wasted time and excessive costs,” they added.
“To state it bluntly, US regulators 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.”
Despite recently securing significant partnerships, including one with payment giant Mastercard, Unbanked has made the difficult decision to shut down. The company’s co-founders had expected a $5 million funding injection, which has yet to materialize. Kane and Gouldman attribute this to the challenging regulatory environment for crypto in the United States, which they believe has limited Unbanked’s ability to raise capital and sustain the business.
Unbanked had signed a term sheet for a $5 million investment at a $20 million valuation three weeks ago, which would have allowed the company to continue operations and expand. However, the funds have not been received, prompting the decision to wind down operations. The firm has advised its clients to withdraw all their funds as soon as possible.