Early Entry and Rapid Growth
- In 2019, Vast Bank partnered with Coinbase and SAP to offer crypto trading directly through its checking accounts.
- By 2021, the launch of the “Vast Crypto” app allowed customers to buy, sell, and hold cryptocurrencies.
- This innovative approach reportedly led to a 50% growth in Vast’s retail customer base in just eight weeks.
Regulatory Hurdles and Market Volatility
- In late 2023, the Office of the Comptroller of the Currency (OCC) issued a consent order to Vast Bank, citing concerns about “unsafe or unsound practices” related to its crypto activities.
- This intervention coincided with the collapse of major crypto exchange FTX, which caused turmoil in the entire market.
Strategic Exit and Uncertain Future
- Vast Bank’s CEO, Tom Biolchini, stated that the decision to exit the cryptocurrency market was a strategic move directed by the OCC.
- The bank’s response to the OCC order focused on its involvement in the cryptocurrency sector.
Lingering Questions and Market Impact
- Vast Bank’s exit raises questions about the future of traditional bank involvement in cryptocurrency.
- Banks face significant challenges in ensuring compliance and mitigating risks in this emerging financial landscape.
Implications for Crypto Investors and Consumers
- Investors and consumers should carefully consider the regulatory landscape and inherent volatility before making any investment decisions.
- Banks looking to enter the crypto space need robust risk management and compliance strategies.
