To exit the cryptocurrency industry, Vast Bank, which claimed to be the first bank in the United States to permit customers to buy, sell, and retain cryptocurrencies “alongside a traditional checking account,” has discontinued its mobile crypto banking app.
Vast Bank stated in its website’s Frequently Asked Questions (FAQ) section that American Banker was the first to identify that it would refund any remaining cryptocurrency deposits using liquidation.
“To strategically align our operations, effective Wednesday January 31st, 2024, we will be disabling and removing the Vast Crypto Mobile Banking application from Google and Apple, which means your Vast Crypto Mobile Banking account(s), including any Digital Assets held in custody, will be liquidated and closed.”
Before entering the cryptocurrency sector in 2019, Vast Bank collaborated with Coinbase and SAP in 2021 to develop a mobile banking application compatible with cryptocurrencies. However, American Banker reports that the Office of the Comptroller of the Currency issued a consent order to the bank in late 2023.
According to the OCC order, Vast Bank is purportedly involved in “unsafe or unsound practices” about risk management and control. The order centers on the institution’s participation in cryptocurrency.
Vast Bank issued a press release in November 2023, shortly after the OCC order, announcing its intention to realign its operations towards “traditional banking” and discontinue its involvement in cryptocurrency.
“Beginning in 2019, Vast added a range of digital banking services such as cryptocurrency to its product mix. … However, the ever-changing and unclear regulatory environment in digital banking coupled with macroeconomic headwinds make future growth more difficult to predict.”
Although Vast Bank did not explicitly mention regulatory uncertainty, numerous analysts attribute the overall hesitancy of U.S. banks to invest in the cryptocurrency sector to that very factor.
Pro-cryptocurrency government officials have expressed vehement opposition to the Securities and Exchange Commission’s putative catch-as-catch-can approach to cryptocurrency regulation, according to a recent report.
