Unbanked shuts down crypto services, says US regulations prevented fundraising

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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.

The post Unbanked shuts down cryp­to ser­vices, says US reg­u­la­tions pre­vent­ed fundrais­ing appeared first on Cryp­toSlate.

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