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Vast Bank set to shutdown its mobile app and exit the crypto space

TL;DR

  • Vast Bank has announced the decision to exit the crypto space and shut down its mobile application.
  • Regulatory pressure and strategic realignment.

Vast Bank, a distinguished U.S. financial institution headquartered in Oklahoma, has recently made the decision to exit the cryptocurrency market. This strategic move, effective January 31, 2024, entails the discontinuation of its crypto mobile banking application, marking a significant shift in the bank’s operational strategy.

Vast Bank set to exit the crypto industry

Originally introduced in 2021, Vast Bank’s mobile app revolutionized the banking landscape by providing customers with the ability to seamlessly manage cryptocurrencies alongside traditional banking services. Developed in collaboration with esteemed partners such as German software company SAP and leading crypto exchange Coinbase, the app allowed users to buy, sell, and hold cryptocurrencies within the familiar framework of their conventional checking accounts.

This groundbreaking service positioned Vast Bank as an industry innovator, distinguishing it as the first U.S. bank to integrate cryptocurrency transactions into its banking operations. However, the bank’s venture into the cryptocurrency space encountered regulatory obstacles, culminating in a consent order issued by the Office of the Comptroller of the Currency (OCC) in October 2023.

The order cited concerns regarding Vast Bank’s practices, deeming them “unsafe or unsound.” These concerns encompassed various critical aspects, including capital ratios, strategic planning, project management, liquidity, and interest rate risk management. In response, Vast Bank was mandated to submit a revised capital and strategic plan and establish a compliance committee to address these regulatory deficiencies.

Tom Biolchini, Chief Executive of Vast Bank, framed the decision to withdraw from the cryptocurrency market as a strategic maneuver. He emphasized the need to distinguish the bank’s cryptocurrency initiatives from its core community banking services. This strategic realignment underscores Vast Bank’s proactive response to regulatory pressures and its commitment to mitigating risks associated with digital asset custody and trading.

Regulatory pressure and strategic realignment

As the app approaches its shutdown date, affected customers have been informed of the limitations regarding cryptocurrency transfers. They are advised that cryptocurrency holdings cannot be transferred to external wallets or platforms. Instead, customers are encouraged to liquidate their digital assets within the app and withdraw the corresponding USD funds.

Furthermore, Vast Bank has pledged to issue cashier’s checks to customers with closed accounts, ensuring a smooth transition process. The bank has also assured continued support for customers seeking account statements and other essential documents post-account closure.

Vast Bank’s decision to exit the cryptocurrency market and discontinue its crypto mobile banking application reflects a strategic recalibration driven by regulatory imperatives and risk management considerations. Despite its pioneering role in integrating cryptocurrency services into traditional banking, the bank has opted to refocus its efforts on core community banking services.

This decision was taken in response to evolving regulatory dynamics. This strategic pivot underscores Vast Bank’s unwavering commitment to safeguarding its operations and maintaining compliance with regulatory standards while prioritizing the needs of its customers.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Owotunse Adebayo

Adebayo loves to keep tab of exciting projects in the blockchain space. He is a seasoned writer who has written tons of articles about cryptocurrencies and blockchain.

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