Vast Bank Withdraws From Cryptocurrency Sector, Shuts Down Mobile App
Vast Bank, the U.S. financial institution that once offered customers the unique ability to manage cryptocurrencies alongside traditional banking, is exiting the digital asset space and shutting down its crypto mobile app in response to a consent order from the Office of the Comptroller of the Currency (OCC).
Vast Bank Closes Cryptocurrency App, Exits Digital Asset Market Amid Regulatory Pressures
Vast Bank, headquartered in Oklahoma, United States, has announced its departure from the cryptocurrency market, coupled with the closure of its crypto mobile banking application. This decision, effective as of Jan. 31, marks a shift in the bank’s operational focus.
Introduced in 2021, Vast Bank’s mobile app, developed in collaboration with German software company SAP and crypto exchange Coinbase, allowed customers to buy, sell, and hold cryptocurrencies alongside their traditional checking accounts. This service positioned Vast Bank as the first U.S. bank to integrate cryptocurrency transactions into a conventional banking framework.
However, a recent statement on the bank’s website reveals a strategic reorientation:
To strategically align our operations, effective Wednesday, January 31st, 2024, we will be disabling and removing the Vast Crypto Mobile Banking application 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.
This closure comes in the wake of a consent order issued by the OCC in October 2023, which cited the bank for engaging in “unsafe or unsound practices.” These practices ranged from concerns over capital ratios and strategic planning to deficiencies in project management, liquidity, and interest rate risk management, among others. The order necessitated Vast Bank to submit a revised capital and strategic plan and to establish a compliance committee to address these issues.
Tom Biolchini, Vast Bank’s Chief Executive, reflected on the decision to exit the crypto market as a “strategic decision,” citing the need to distinguish the bank’s cryptocurrency initiatives from its core community banking services. This move aligns with the bank’s response to regulatory pressures and the desire to mitigate risks associated with digital asset custody and trading.
Customers affected by the app’s shutdown have been instructed that they cannot transfer cryptocurrencies to other wallets or platforms. Instead, they must liquidate their digital assets within the app and withdraw the USD funds. For those with accounts already closed, Vast Bank has committed to issuing cashier’s checks mailed to the addresses on file. Additionally, the bank assures ongoing support for obtaining account statements and other documents post-account closure.
Does this move by Vast Bank represent the broader banking industry’s reluctance to deal with cryptocurrency and digital asset services? Share your thoughts and opinions about this subject in the comments section below.