Vast Bank Closes Mobile Crypto App
Vast Bank, which claimed to be the first US bank to offer customers the ability to buy, sell, and hold cryptocurrencies alongside traditional banking services, has shut down its mobile crypto app. The bank announced that it will be refunding any remaining crypto holdings through liquidation. In a FAQ on its website, Vast Bank stated that it is exiting the crypto industry to align its operations strategically. The decision to close the app comes after Vast Bank partnered with Coinbase and SAP in 2021 to create a crypto-friendly mobile banking app.
Regulatory Challenges and Focus on Traditional Banking
The Office of the Comptroller of the Currency (OCC) issued a consent order to Vast Bank in October 2023, citing “unsafe or unsound practices” related to risk management and control, particularly concerning its crypto activities. In response, Vast Bank decided to return to its traditional banking focus. The bank cited the ever-changing and unclear regulatory environment in digital banking as a challenge for future growth.
Reasons for Closure
The specific reasons for the closure of Vast Bank’s crypto functions were not specified in its FAQ. However, during an interview with local news station News on 6, Vast Bank chairman Tom Biolchini mentioned that the OCC order was directed at their cryptocurrency strategy. He described the decision to exit the market as a strategic one and emphasized the importance of distinguishing cryptocurrency from Vast Bank’s community banking services.
Hot Take: First US Bank with Crypto Checking Accounts Shuts Down Crypto App
Vast Bank made headlines as the first US bank to introduce crypto checking accounts. However, it has now reversed course by closing its mobile crypto app. Regulatory challenges and a focus on traditional banking were cited as reasons for this decision. While Vast Bank aimed to offer seamless cryptocurrency transactions, the ever-changing regulatory landscape in the crypto industry posed difficulties. By exiting the market and liquidating remaining crypto holdings, Vast Bank hopes to refocus on its core community banking services. This move highlights the challenges faced by traditional banks venturing into the world of cryptocurrencies.
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