Vast Bank has decided to shut down its mobile crypto app and exit the cryptocurrency industry after receiving a consent order from the Office of the Comptroller of the Currency (OCC) in October 2023.
The bank, which previously allowed its customers to buy, sell, and hold cryptocurrencies alongside a traditional checking account, announced on its website that it will refund any remaining crypto through liquidation. The OCC's consent order alleged that Vast Bank engaged in ‘unsafe or unsound practices’ surrounding risk management and control such as capital and strategic planning, project management, books and records, custody account controls and risk management for new products, focusing on its involvement in cryptocurrency.
According to the consent order, the lender needs to achieve and maintain a total capital ratio of at least 13% and a leverage ratio of at least 10% within 60 days following the order. Vast Bank had a total capital ratio of 4.75% on December 31 and its leverage ratio was 2.46%.
As per an official statement, to strategically align its operations, the bank disabled and removed the Vast Crypto Mobile Banking application from Google and Apple on January 31st, 2024. In addition, customers' Vast Crypto Mobile Banking account(s), including any Digital Assets held in custody, will be liquidated and closed, and they will receive stranded assets via cashier’s check. Moreover, Vast said it doesn’t support crypto transfers to another exchange or platform.
Vast Bank, a US-based family-owned bank, is at the forefront of digital currencies in the traditional banking space, by being the first federally chartered bank allowing customers to buy and sell crypto. The bank stated in 2016 that the industry was changing, and it needed to provide financial services in a way that aligned with customer preferences, including for the crypto-curious.
In 2021, Vast Bank partnered with Coinbase and SAP on its crypto-friendly mobile banking app, launching its crypto-banking services that allowed customers to store and exchange digital assets. This move was projected to significantly grow its retail customer base. A year later, the crypto went into a major crash when FTX, the crypto exchange founded and operated by Sam Bankman-Fried, declared bankruptcy.
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