Vast Bank Exits Crypto After Regulatory Headwinds

    Vast Bank, the first US bank to intertwine crypto with traditional banking, announces its exit from the cryptocurrency industry. Regulatory issues, including a consent order from the OCC, lead to the liquidation of crypto holdings.

    • Vast Bank Closure: First US bank to integrate crypto with traditional checking accounts shuts down.
    • Regulatory Challenges: Office of the Comptroller of the Currency issues consent order citing “unsafe or unsound practices” in crypto operations.
    • Liquidation Announcement: Vast Bank liquidates crypto holdings, exits the cryptocurrency industry.

    Crypto Integration Closure:

    Vast Bank, once hailed as the pioneer in allowing customers to manage cryptocurrencies alongside traditional accounts, has announced the closure of its mobile crypto banking app. The move comes as the bank faces regulatory challenges.

    Regulatory Intervention: The Office of the Comptroller of the Currency issued a consent order, alleging Vast Bank’s engagement in “unsafe or unsound practices” related to risk management in the cryptocurrency sphere. This intervention follows Vast Bank’s partnerships with Coinbase and SAP for its crypto-friendly app in 2021.

    Strategic Shift to Traditional Banking:

    Following the regulatory hurdles and the ever-evolving digital banking landscape, Vast Bank decided to pivot away from crypto. A press release in November 2023 highlighted the bank’s intention to refocus on “traditional banking” due to the unpredictable regulatory environment and macroeconomic challenges.

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