Vast Bank, a financial institution that positioned itself as the first U.S. bank allowing customers to manage cryptocurrencies alongside traditional banking services, has announced the closure of its mobile crypto banking app. The move comes as part of Vast Bank’s decision to exit the cryptocurrency industry entirely.
In a Frequently Asked Questions (FAQ) section posted on its website, Vast Bank explained that it would be refunding any remaining cryptocurrency holdings to users through a liquidation process. The bank initially entered the cryptocurrency industry in 2019 and had previously established partnerships with Coinbase and SAP for the development of its crypto-friendly mobile banking app in 2021.
However, Vast Bank faced regulatory challenges, and in late 2023, it received a consent order from the Office of the Comptroller of the Currency. The regulatory scrutiny and the consent order likely played a role in the bank’s decision to shutter its mobile crypto banking app and exit the cryptocurrency space.
The integration of crypto-related exchange-traded products (ETPs) has been a notable trend, potentially opening avenues for traditional banks to provide certain crypto-related services within regulatory guidelines. As the regulatory landscape continues to evolve, financial institutions are navigating challenges and opportunities associated with offering cryptocurrency services.
The closure of Vast Bank’s crypto banking app reflects the complexities faced by traditional banks entering the cryptocurrency industry, where regulatory compliance and evolving legal frameworks play a crucial role. The decision may also prompt discussions within the industry about the path forward for banks seeking to provide integrated crypto and traditional banking services.
Digital Assets Desk