Crypto fintech firm Unbanked, which provides cryptocurrency custody and payment services, has become the latest firm to shut down, citing the harsh regulatory environment for crypto in the United States.
On the May 26 blog postUnbanked co-founders Ian Kane and Daniel Gouldman said they believed when it first opened that building a company in the United States “would be the smart long-term play,” though that hasn’t turned out to be the case. years later.
“While other crypto companies have grown rapidly offshore by avoiding strict regulation, we believed that working with regulators and following their demanding processes would ultimately position Unbanked to gain traction,” the directors said.
Today we are making the unfortunate decision to cancel Unbanked.
Withdraw your funds (crypto + USD) from your accounts as soon as possible.
More details are available here: https://t.co/oWR7m3ZqlM
— Unbanked (@UnbankedHQ) May 25, 2023
Instead, the decision led to “lots of wasted time and excessive costs,” they added.
“To put it bluntly, US regulators are actively trying to stop companies (banks and fintechs) from supporting crypto-assets – even when companies are trying to do it right and according to the rules.”
Unbanked’s decision to wind down operations comes despite the firm closing major deals with other companies in recent months, including and partnership with the payment giant Mastercard.
The co-founders said the firm had expected a $5 million cash injection, but that still hasn’t materialized. Kane and Gouldman said they believe this is a result of the regulatory climate for crypto in the US, which “ultimately limited Unbanked’s ability to raise capital and operate a self-sustaining business.”
“Three weeks ago, Unbanked signed a term sheet for a $5 million investment at a $20 million valuation, which would allow us not only to continue operating, but also to expand. We have not received these funds to date,” the company explained.
The firm urged its clients to start withdrawing all funds “as soon as possible”.
Cointelegraph has contacted Unbanked for comment but has not yet received a response.
Crypto firms are feeling the cold
Unbanked was not alone in its situation.
May 23 bitcoin (BTC) Lightning Network payments company dubbed BottlePay has also closed its doors, with all services completely shut down until June 24. She did not give a reason for the closure.
We are very sorry that the Bottlepay consumer app will be shutting down, we have loved every minute of running Bottlepay and are incredibly grateful to you, the customers, who have kept us going for as long as we have.
Link: https://t.co/D5iH97IYMd— Bottlepay (@bottlepay) May 22, 2023
Just a day earlier, the HotBit crypto exchange announced that it would also be quietand encourages all its customers to withdraw funds from the platform as soon as possible.
While he noted that FTX collapse and temporary Depeg USD coin (USDC), had a significant impact on its operation, Hotbit claimed that the main reason for the deterioration is a former team member who became subject of investigation in August . According to the stock exchange, the probe forced it to shut down its business for weeks.
Related: Digital Currency Group to close institutional business unit TradeBlock
Also on May 12, a partially owned NFT platform called Teressa closed its doors permanently, claiming that its corporate structure and financial situation prevented it from continuing to operate.
In now deleted tweetco-founder of Tesera, Andy Chorlian said it had made the “incredibly difficult decision” to close all of its operations over the next few weeks.
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