First US Bank Goes Cryptocurrency-Free

Vast Bank, which claimed to be the first US bank to offer cryptocurrency services alongside traditional banking, has decided to shut down its mobile crypto banking app and withdraw from the cryptocurrency industry. The bank stated in a FAQ on its website that it will refund any remaining cryptocurrencies to its customers through liquidation. Vast Bank entered the crypto industry in 2019 and had partnered with Coinbase and SAP on its mobile banking app. The bank received a consent order from the Office of the Comptroller of the Currency (OCC) in late 2023, accusing it of engaging in unsafe practices related to risk management and control, specifically focusing on its involvement in cryptocurrency. Following the OCC order, Vast Bank announced that it would refocus on traditional banking and move away from crypto due to the uncertain regulatory environment and challenging economic conditions. While not explicitly mentioning regulatory uncertainty, many analysts believe that it is a primary reason for the banking industry’s caution towards cryptocurrencies. Some pro-crypto government officials have criticized the Securities and Exchange Commission’s approach to regulating cryptocurrencies.