Vast Bank, which touted itself as the pioneer among U.S. banking institutions in allowing customers to seamlessly manage cryptocurrencies alongside their traditional checking accounts, has made a surprising move by shutting down its mobile crypto banking app and expressing its intention to exit the cryptocurrency industry.
According to an FAQ published on the bank’s website, Vast Bank has decided to disable and remove the Vast Crypto Mobile Banking application from both Google and Apple platforms as of Wednesday, January 31st, 2024.
Consequently, all Vast Crypto Mobile Banking accounts, including any digital assets held in custody, will undergo liquidation and closure, with remaining crypto holdings refunded to account holders.
Vast Bank ventured into the crypto sector back in 2019, forming partnerships with industry giants like Coinbase and SAP to launch their crypto-friendly mobile banking app in 2021.
However, the bank faced regulatory challenges, receiving a consent order from the Office of the Comptroller of the Currency (OCC) in late 2023.
The OCC’s order alleged that Vast Bank had engaged in “unsafe or unsound practices” related to risk management and control, with a particular focus on the institution’s involvement in cryptocurrencies.
READ MORE: Artists Ryder Ripps and Jeremy Cahen Ordered to Pay $9 Million in BAYC NFT Lawsuit
Shortly after the issuance of the OCC order, Vast Bank released a statement in November 2023, indicating a shift in its strategic direction.
The bank expressed its intention to refocus on “traditional banking” and pivot away from the crypto space. Vast Bank highlighted the ever-evolving and unclear regulatory landscape in digital banking, coupled with macroeconomic challenges, as factors contributing to its decision to withdraw from the crypto industry.
While Vast Bank did not explicitly mention regulatory uncertainty as the reason for its exit, it is widely acknowledged that the broader U.S. banking industry has exhibited hesitancy toward fully embracing cryptocurrencies due to regulatory ambiguity.
Some observers have pointed out the opposing stance of pro-crypto government officials who have voiced their concerns over the Securities and Exchange Commission’s inconsistent approach to cryptocurrency regulation.
In light of these developments, Vast Bank’s decision to exit the cryptocurrency space marks a notable shift in the landscape of traditional banking institutions’ engagement with digital assets, emphasizing the ongoing challenges posed by regulatory frameworks in the United States.
Discover the Crypto Intelligence Blockchain Council
