Vast Bank Set to Exit Cryptocurrency Sector, Shuts Down Crypto Banking App
Summary:
Vast Bank, a pioneer in integrating traditional banking and digital currencies, has decided to close its mobile app for crypto banking and depart from the cryptocurrency industry. The closure will take effect from January 31, 2024, with the remaining crypto assets being liquidated and refunded to the holders. The decision was influenced by the Office of the Comptroller of the Currency's (OCC) 2023 consent order against the bank for alleged risky practices related to cryptocurrency. Vast Bank will now reorient its focus towards traditional banking amidst uncertainties in the digital banking regulatory environment.
Vast Bank, which prides itself on being the first banking institution in the United States to permit its customers to purchase, trade, and store cryptocurrencies alongside their regular checking account, has decided to shut down its mobile app for crypto banking. It has also communicated its plan to completely withdraw from the cryptocurrency sector. As per an FAQ page on the bank's website that was first noticed by American Banker, Vast Bank will refund any residual crypto to the holders through liquidation. The removal of the Vast Crypto Mobile Banking application from Google and Apple platforms will take effect on January 31, 2024, per their statement, which highlights a strategic alignment of the bank's operations.
Vast Bank had forayed into the crypto realm back in 2019 and had an alliance with Coinbase and SAP to develop a mobile banking app with crypto-friendly features in 2021. As American Banker reports, the Office of the Comptroller of the Currency (OCC) issued a consent order to the bank in late 2023. This order alleges that the bank adopted risky or disgruntled practices relating to risk management and control, especially focusing on its dealings in cryptocurrency.
In a subsequent press release in November 2023, following the OCC order, Vast Bank announced its redirection of resources towards conventional banking, indicating a shift away from cryptocurrencies. Since its 2019 onwards evolution into digital banking, the bank felt hampered by the fluctuating and ambiguous regulatory landscape in digital banking and macroeconomic challenges, making it harder to predict future growth.
Although Vast Bank did not directly mention regulatory uncertainty as a reason, many experts believe that this is the primary cause behind the hesitation of the U.S. banking industry to fully engage with the cryptocurrency sector. As reported recently by Cointelegraph, governmental officials supportive of crypto have expressed their discontent towards the Securities and Exchange Commission's (SEC) apparent indiscriminate approach towards regulating cryptocurrencies.
Published At
2/5/2024 9:20:08 PM
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