Today, we are making the unfortunate decision to wind down Unbanked. When we started the company back in 2018 we knew blockchain was the best way to transmit value in the form of cryptocurrencies or stablecoins, but it needed to be connected with the existing global financial system for everyday use. Integrating the blockchain to on and off-ramps like bank accounts and debit cards allowed a “best of both worlds” scenario providing customers better control over their money with lower fees and more convenience.
The crypto landscape 5 years ago was very different from today and many people believed that the banks or card networks would never get on board with Unbanked’s mission. Others thought crypto companies would not want to use Unbanked white-label services as their own infrastructure. We were able to prove naysayers wrong, supporting more than 25 companies across various countries with hundreds of thousands of users. The industry on a global scale has come very far since that time and continues to grow stronger than ever before.
We believed that building Unbanked on-shore in the United States would be the smart long-term play. While other crypto companies grew rapidly off-shore by avoiding strict regulation, we believed that engaging with regulators and following their arduous processes would ultimately position Unbanked to come out ahead. We unfortunately learned this was not the case and taking this path lead to a lot of wasted time and excessive costs. To state it bluntly, US regulators are actively trying to stop companies (banks and fintechs) from supporting crypto assets – even when the companies are trying to do it correctly and by the book. Their efforts are working and ultimately limited Unbanked’s ability to raise capital and run a self-sustaining business.
Unbanked never raised a large institutional round and most of our growth came from bootstrapping and revenue from operations. The majority of Unbanked’s funding came from supporters in various crowdfunding campaigns. In total, Unbanked raised $4M over the span of 5 years from roughly 6,000 investors. The investors hurt by Unbanked’s shutdown are not large institutions, but rather individuals who invested their own money with the belief that blockchain was the future and the US companies doing things in a regulated way were the best bet.
Most frustrating of all with this update is that it should have been a positive one. Three weeks ago Unbanked signed a term sheet for an investment of $5 million dollars at a $20 million valuation that would allow us to not only continue operations but to expand. We have not received those funds as of this moment. We are still optimistic that we will receive these funds; if we do – Unbanked will resume operations and will be stronger than ever. However, the money doesn’t count until it’s in the bank. We will also continue to explore alternative funding sources.
Given the situation, it was important for us to communicate what was happening to our customers and partners. All Unbanked customers and those through our white-label programs should begin withdrawing all funds (crypto and USD) as soon as possible. Unbanked has always maintained customer funds separate from business operations and all funds have been maintained 1:1 regardless of the asset you maintained with us. We plan to leave the withdrawal functionality on for the next 30 days, but please do not wait to start withdrawing funds. This includes wires, ACH, Plaid, and crypto withdrawals to wallets whether that’s LTC, USDT, UNBNK, or any asset your funds are currently held in.
This decision to wind down Unbanked has not come lightly, but we have exhausted all options. The closure has not come from a lack of effort in exploring any and all viable options from our team. The entire Unbanked team should be commended for their relentless efforts and dedication to building this company over the last 5+ years. We have a very dedicated and talented team who went above and beyond their responsibilities because they believe in the mission.
We hope that one day, perhaps sooner than later, we can revive Unbanked or another company with better funding can continue on with our core mission.
We thank you all for your support and understanding.
Ian Kane
Daniel Gouldman
