Unbanked Investor Update – April 2023
Hello Everyone!
Needless to say that there has been no shortage of news since the last investor update in January. If you had told me at the end of 2022 that Unbanked would be worth more than companies like BlockFi, Celsius, FTX, Voyager, etc. – I would have said you’re crazy. It seems every week we’re getting news of another company that has become insolvent due to market volatility, lack of funding, raising interest rates, or cut-off connections to banking partners.
Volatility has spilled over into the banking sector with the failure of Silvergate, Signature, and Silicon Valley Bank. We have seen US regulators aggressively go after companies in the crypto space or their banking partners. Most eye-opening was Coinbase being served a Wells Notice by the SEC. You can read their response here. While I don’t know all of the details, I do believe Coinbase to be one of the most respected companies in our industry and one trying to build products correctly. Even Custodia bank (which intended to back FIAT deposits 1:1 with stablecoins) was denied an application and connection to the FED.
The unfortunate result of all of this is an element of throwing the baby out with the bath water. Bad actors and poorly managed companies were rightfully put out of business in the past year, but there is also collateral damage that comes with aggressively going after an entire industry with no distinction between good and bad players. It stifles innovation and pushes talent off-shore which is a negative for the US.
When the internet started to gain mass adoption in the 90s the US was quick to embrace innovation and set-forth regulations when necessary. The result was the emergence of US-based companies like Google, Apple, Facebook, and others – creating trillions in value. When we’re talking about the future of money and ensuring that the dollar remains the reserve currency of the world – the US would benefit from the same approach of embracing technology, innovation, and those companies operating here.
While all of this is frustrating at times, our strategy at Unbanked remains the same as it was back when we started in 2018. Embrace regulation and engage with regulators. You don’t build a long-term sustainable business by cutting corners. While the process can be slow, it’s not without merit.
Now, let’s get to the important stuff!
Transitioning Away from Metropolitan Commercial Bank
One of Unbanked’s first banking partners (dating back to 2018) was Metropolitan Commercial Bank. Unfortunately, MCB has made the decision to stop supporting any and all businesses that touch digital currencies. You can read more about that decision in their press release.
Ultimately, for Unbanked, this means that BlockCard (and other white-label card programs) will be transitioned away from MCB in the coming weeks. If you’re a current card holder then expect further details by email and physical mail. This will only impact US card programs and not international card programs or bank accounts.
Banks play an important regulatory role as the “BIN Sponsor” for a card program. BIN Sponsors are typically financial institutions that are regulated in a certain country to issue a BIN. A BIN Sponsor holds a “Principal Membership” with card networks like VISA and MasterCard and in the US principal card members must qualify for FDIC insurance (aka – banks).
Unbanked has already been having discussions with new BIN Sponsors to transition our existing programs. It’s a process, but one thing our entire team prides itself on is our compliance. This is extremely important for banks and one of the things that have made this transition process a bit easier.
KingsCrowd Capital Invests in Unbanked
KingsCrowd Capital is a data-driven venture capital fund owned by KingsCrowd. Over the years KingsCrowd has followed Unbanked and reported on our crowdfunding campaigns on Republic and Start Engine. Both times Unbanked achieved a “Top Deal” rating from KingsCrowd and was recommended to their user base.
However, the reason I’m so proud of this investment is that KingsCrowd sees ALL of the crowdfunding deals and they are in the business of researching and rating them. They know what to look for when making a recommendation and then put their money where their mouth is by also investing themselves.
Read the Press Release: Investments in Unbanked Soar as KingsCrowd Capital Invests After Unbanked Is Rated A “Top Deal
Furthermore, their team has spent many hours in discussions with Unbanked researching and understanding our business. Their analyst report “Unbanked Provides Crypto Payments Without the Headache” does a great job of breaking down the business and the pros and cons. This is important because often times people make incorrect assumptions about what Unbanked is building or how to bucket us. However, the people who really take the time to understand and peel back the layers see how important our platform is and powerful it will be at scale.
“Our investment research team has followed Unbanked for over a year and spent a lot of time talking with their team during our due diligence,” said Ahmad Takatkah, CIO at KingsCrowd. “During our conversations, it became clear that Unbanked has built something incredibly special and defensible in the fintech industry which made it a great fit for our portfolio.”
Multi-Wallet Feature for Unbanked Card Spend
Our team has released a multi-wallet feature that has been highly requested by our customers. The multi-wallet functionality enables the cardholder to now keep their spending balance in a stablecoin. Users now have the power to select whether their spendable value is held in UNBNK or USDT. This is extremely beneficial during periods of extreme crypto volatility where the card holders want to know the card spending power will not fluctuate.
Here’s how it works:
- When you make a deposit to your Unbanked dashboard your funds are converted automatically to the spendable asset you set.
- Keeping UNBNK as your spendable assets makes all other depositing assets (BTC, ETH, LTC, etc.) convert to UNBNK
- Keeping USDT as your spendable assets makes all other depositing assets (BTC, ETH, LTC, etc.) convert to USDT
You can decide which asset to keep your spending power in at any time! Plus we intend to add other spendable assets in the future (like Bitcoin).
Physical Cards are Shipping in the UK & Europe
Physical cards have arrived and are now being shipped out to European residents. Residents can now get a physical copy of their Unbanked card to go along with their virtual card. People are also sharing their Unbanked cards on social media!
If you were an early adopter and only received a virtual card then login to your Unbanked dashboard now to get a physical card. Delivery time takes approximately 5-10 business days depending on location.
Press On European White-label with Mastercard and Litecoin Foundation
We did a big press push to announce that Unbanked teamed up with Mastercard to accelerate our white-label crypto card issuance for other Web3 companies across the UK & Europe. With this launch Unbanked (and our white-label partners) are now reaching 84% of Europe’s population. To kick off our partnership we opened the Litecoin Card to residents of the UK and Europe.
Some of the social media and press coverage:
- Litecoin’s Tweet: https://twitter.com/LTCFoundation/status/1620070229383733249?s=20&t=7VVqo2Dj4QRwbCgGb3cqfg
- Coinrise: https://thecoinrise.com/unbanked-and-mastercard-team-up-to-accelerate-crypto-card-adoption-within-web3-organizations-in-europe/
- Bitcoin.com https://news.bitcoin.com/unbanked-and-mastercard-team-up-to-accelerate-crypto-card-adoption-within-web3-organizations-in-europe/
- Bitcoin News Tweet: https://twitter.com/BTCTN/status/1620120132872699905?s=20&t=6hcN3ZSMvK6Z_Q6c7vgT_Q
Bitmart Lists UNBNK for Trading
Exchange listing has never been a core focus for Unbanked, but it is something we do as the opportunity presents itself. Listing on exchanges like Bitmart is a great way for new users to learn about UNBNK and therefore learn about our products. I’m happy to share that UNBNK (Ethereum-based version) is now available for trading on Bitmart.
Interview with Qorus-CapGemini
You may recall in my last update I shared that Unbanked took 2nd place in Qorus-Capgemini NewTech Challenge. I recently did a follow-up interview with Open Finance Community Leader, Sarah Kocianski, and discussed Unbanked’s mission and projects, the importance of innovation in fintech, and Unbanked key objectives for 2023.
16 Days Left to Invest in Unbanked Inc.
Our campaign on Start Engine is coming to an end so if you want to become an investor in Unbanked or expand your current investment amount – now is the time!
You might recall when we won the Start Engine pitch competition Kevin O’Leary had this to say:
“I’m gonna go with Ian & Daniel at Unbanked because they have proven their model in a really interesting place and they have significant revenues, but they are not the only great team of entrepreneurs in this contest. If I had to put two million bucks to work I’d probably put it in there right now.”
We wanted to give everyone a chance to invest in Unbanked and become an owner. The minimum investment is $250 and there are a limited amount of shares offered via a SAFE at a 20% discount.
IMPORTANT: This is likely the last time we’ll do a SAFE offering with a 20% discount. Our intent is to make the next round a price round with a large institutional investor. If you have an interest in investing do not wait.
That’s it for now. I appreciate all of you who took the time to read this long update! The crypto industry is going through a tumultuous time in the US, but our team continues to see opportunities for compliant companies operating the right way. Plus, a growing opportunity to expand in markets like UK/EU, LATAM, EMEA, APAC, and many others. Strategically, we have been building towards this global path for years and I believe we can capitalize on it.
We appreciate everyone’s support and excitement for Unbanked. More to come!
-Ian
