A bank claiming to be the first US banking institution to allow its customers to buy, sell and hold cryptocurrencies “along with a traditional checking account” shut down its mobile cryptocurrency app last week.
In an FAQ posted on its website, Vast Bank said it is exiting the cryptocurrency industry and will return remaining cryptocurrencies to any holders through liquidation.
“To strategically align our operations, effective Wednesday, January 31, 2024, we will disable and remove the Vast Crypto Mobile Banking app from Google and Apple, meaning your Vast Crypto Mobile Banking account(s), including any held digital assets,” the announcement said. It will be filtered and closed.
In 2021, Vast Bank partnered with Coinbase and SAP to create a crypto-friendly mobile banking app.
“We believe we are the first national bank to enable seamless buying and selling of cryptocurrencies from a single bank account,” Brad Scrivner, then CEO, told CNBC.
Vast Bank is exiting cryptocurrencies
In October 2023, the Office of the Comptroller of the Currency (OCC) issued an order approving Vast Bank. The OCC order alleges that the bank engaged in “unsafe or unsound practices” regarding risk management and control, with a focus on the organization’s cryptocurrency activities.
In November 2023, Vast Bank indicated that it would return to its roots and focus on traditional banking.
“Beginning in 2019, Vast has added a range of digital banking services such as cryptocurrencies to its product mix. …However, the ever-changing and unclear regulatory environment in digital banking coupled with macroeconomic headwinds makes forecasting future growth more difficult.”
Reasons for closing the Crypto Mobile application
Vast Bank's FAQ does not specify the reasons for closing its crypto functions.
During a November 2023 interview with local news station News on 6, Vast Bank Chairman Tom Biolcini stated that the OCC order was specifically directed toward their cryptocurrency strategy.
He went on to describe the decision to exit the market as a “strategic decision,” highlighting the importance of distinguishing between “cryptocurrency and the community banking that Vast Bank is.”
“I think once they see that we're taking these aggressive steps to get out of crypto and focus on community banking, I think we'll get back to where we wanted to go,” Biolcini said.
