Unbanked, a pioneering crypto fintech firm specializing in custody and payment services, has recently decided to wind down its operations.
Having been established in 2018, the company’s primary goal was to bridge the gap between traditional financial systems and blockchain technology, empowering users with greater control over their finances through reduced fees and enhanced convenience. However, the Unbanked encountered substantial challenges arising from the regulatory landscape in the United States and difficulties in securing adequate funding.
The Evolving Crypto Landscape
When Unbanked began its operations, the crypto landscape vastly differed from today. Unbanked deliberately chose to establish its procedures on-shore within the United States, optimistic that engaging with regulators and adhering to regulations would pave the way for long-term success.
Unfortunately, this strategic decision resulted in a squandering of time, high costs, and restricted growth due to the numerous regulatory constraints faced by the company. US regulators actively hindered companies from offering support for crypto assets, even when diligent compliance efforts were made. Consequently, Unbanked’s capacity to secure capital and sustain its operations could have been improved.
Funding Status
Despite expecting a $5 million injection of funding, Unbanked has regrettably not received the anticipated funds. The company primarily relied on crowdfunding campaigns and operational revenue to fuel its growth, with individual investors demonstrating their belief in the future potential of blockchain technology and regulated US companies.
The announcement of Unbanked’s shutdown has profoundly affected the value of the UNBNK token, which has experienced a significant decline in its market performance.
Customer Withdrawals
Unbanked has promptly urged its customers and white-label partners to withdraw all funds held within the platform. The company ensured that customer funds were kept separate from its business operations, maintaining a 1:1 ratio irrespective of the type of assets.
Despite exhaustively exploring all viable options and expressing gratitude towards its dedicated team, Unbanked ultimately found the challenges insurmountable. Nonetheless, the company remains hopeful for a potential future revival or the emergence of another well-funded entity that can continue pursuing its core mission.
Looking Ahead
Unbanked’s decision to cease its operations is a stark reminder of the regulatory hurdles and funding difficulties faced by crypto fintech companies. Despite initially optimistic endeavors to engage with regulators, Unbanked’s experiences highlight the pressing need for greater regulatory clarity and support for the thriving crypto industry.
As the landscape of digital finance continues to evolve, the ability of other companies to navigate these formidable obstacles will significantly shape the future of crypto-based financial services.
