The first US bank to allow customers to keep their crypto accounts in check
Vast Bank, which claimed to be the first US banking institution to allow its customers to buy, sell and hold cryptocurrencies “alongside a traditional checking account,” has announced plans to shut down its mobile crypto banking app and exit the cryptocurrency industry.
In an FAQ posted on the bank's website, which was first seen by Bank of America, Vast Bank said it would return any holders of the remaining crypto in cash.
Effective Wednesday, January 31, 2024, to strategically align our operations, we will disable and remove the Vast Crypto Mobile Banking App 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.
Head wind
Vast Bank currency by the end of 2023.
The OCC's order alleges that Vast Bank engaged in “unsafe or unsound practices” around risk management and controls.
Related: SEC settlement gag rule ‘undermines regulatory integrity' – Hester Peirce
In the year In November 2023, shortly after the OCC order, Vast Bank said it would focus its efforts on “traditional banking” and away from crypto:
Since 2019, Vast has added various digital banking services such as cryptocurrencies to its product portfolio. … However, the ever-changing and unclear regulatory landscape coupled with macroeconomic headwinds in digital banking make it difficult to predict future growth.
Control uncertainty
While Vast Bank didn't specifically mention regulatory uncertainty, many analysts say the US banking industry's general disdain for its commitment to the cryptocurrency sector is at stake.
As Cointelegraph recently reported, pro-crypto government officials have been vocal in their opposition to the Securities and Exchange Commission's proposed take-as-you-can cryptocurrency regulation.
Chairman @GaryGensler's SAB 121 prohibits banks from serving as custodians of digital assets. Today, @RepWileyNickel, @SenLummis and I introduced resolutions to rescind @SECGov's terrible ad.
SAB 121 days down – time to go! ️pic.twitter.com/jTQDdbMm3I
— Rep. Mike Flood (@USRepMikeFlood) February 1, 2024
