<p class="is-style-lead">Unbanked, a crypto fintech firm specializing in crypto custody and payments services, has decided to close its operations, citing a harsh regulatory environment for cryptocurrencies in the United States.</p>



<p>In a blog <a href="https://unbanked.com/unbanked-will-be-winding-down/" target="_blank" rel="noopener">post </a>published on May 26, Unbanked&#8217;s co-founders, Ian Kane and Daniel Gouldman, revealed that despite initially believing that establishing their company in the US would be a wise long-term strategy, their expectations were unmet after five years of operation.</p>



<figure class="wp-block-image size-full is-resized"><img decoding="async" loading="lazy" src="https://crypto.news/app/uploads/2023/05/Screenshot-31.png" alt="Crypto fintech Unbanked shuts down amid US regulatory hurdle - 11" class="wp-image-14161802" width="677" height="699"><figcaption class="wp-element-caption">Source: Unbanked on <a href="https://twitter.com/UnbankedHQ/status/1661793661334552582" target="_blank" rel="noopener">Twitter</a></figcaption></figure>



<h2 class="wp-block-heading" id="unbanked-succumbs-to-regulatory-pressure">Unbanked succumbs to regulatory pressure</h2>



<p>The founders explained that while other crypto companies thrived by operating offshore and evading strict regulations, Unbanked took a different approach by engaging with regulators and adhering to their complex processes to position themselves favorably in the market. However, this decision resulted in substantial time wasted and excessive costs.</p>



<p>Kane and Gouldman candidly stated that US regulators are actively hindering banks and fintech companies from supporting crypto assets, even when they strive to do so in compliance with regulations.</p>



<p>Unbanked&#8217;s closure comes despite the firm&#8217;s recent successful partnerships with major companies, including a <a href="https://crypto.news/unbanked-partners-with-mastercard-to-promote-crypto-card-in-europe/">collaboration</a> with payments giant Mastercard.&nbsp;</p>



<p>Although the firm had expected a $5 million funding injection, it has not materialized. The co-founders attribute this setback to the regulatory climate for cryptocurrencies in the US, severely limiting Unbanked&#8217;s ability to raise capital and operate as a self-sustaining business.</p>



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<p>The company disclosed that it had signed a term sheet for a $5 million investment three weeks ago, with a valuation of $20 million that would have allowed Unbanked to continue its operations and expand. However, the funds were not received at the time of the announcement.</p>



<p>As a result, Unbanked has advised all its customers to withdraw their cryptocurrency and US dollar balances immediately. The company has provided a 30-day withdrawal window but strongly encourages customers to initiate the process as soon as possible.</p>



<p>Although Unbanked did not mention whether it plans to file for bankruptcy, its closure highlights the challenging circumstances crypto businesses face in the US.</p>



<h2 class="wp-block-heading" id="other-crypto-firms-grappling-with-regulatory-challenges">Other crypto firms grappling with regulatory challenges</h2>



<p>Unbanked is not the only company to face difficulties in this space, as crypto exchange HotBit also recently <a href="https://crypto.news/hotbit-suspends-operations-citing-unfavorable-market-conditions/">announced</a> its decision to wind down operations and urged its customers to withdraw funds promptly.</p>



<p>HotBit attributed its deteriorating situation to various factors, including the collapse of FTX and a former team member who became the <a href="https://crypto.news/hotbit-suspends-deposits-and-withdrawals-as-law-enforcement-investigates-former-employee/">subject of an investigation</a> in August 2022, which temporarily suspended its business.</p>



<p>In another development, Digital Currency Group (DCG), the parent company of Genesis Global Capital, has reportedly been unable to meet its obligations of approximately <a href="https://crypto.news/digital-currency-groups-failure-to-pay-630m-raises-concerns/">$630 million</a> to creditors.</p>



<p>This situation has sparked discussions among stakeholders, including Genesis, the Unsecured Creditors Committee (UCC), the Ad Hoc Group of Creditors (AHG), and Gemini, regarding potential forbearance options to prevent a default by DCG.</p>



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<p>Meanwhile, Binance, the world&#8217;s largest cryptocurrency exchange company, faces <a href="https://crypto.news/reports-suggest-binance-mixed-customer-and-company-funds/">allegations</a> of violating US financial rules by mixing customer funds with company revenue.</p>



<p>Binance has refuted these allegations, maintaining that its accounts were exclusively dedicated to facilitating customer transactions.</p>



<p>However, the spotlight on Binance underscores the ongoing challenges faced by crypto firms operating in the US, where regulatory clarity and compliance remain significant concerns.</p>



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Crypto fintech Unbanked shuts down amid US regulatory hurdle

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