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

Regulations affected funding

Unbanked cited regulations as the main reason for its closure. The firm claimed that regulators in the US are “actively trying to prevent companies (banks and fintechs) from supporting crypto assets, even when companies are trying to do it correctly and by the rules” and said that 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. Although he did not indicate what regulations prevented him from receiving the loan, he said that he had not finally received the funds so far.

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

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

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

Other crypto service failures

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

This puts Unbanked in the company of other relatively small cryptocurrency firms that have recently gone out of business, including retail cryptocurrency exchanges Hotbit and Coinloan and Digital Currency Group’s institutional trading subsidiary TradeBlock.

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