Vast Bank in Tulsa, Okla., once a pioneer in serving as a custodian of cryptocurrency, disabled and removed its crypto mobile banking app.
The bank, which shut down the app on Wednesday, informed customers that their crypto mobile banking accounts, including any digital assets held in custody, would be liquidated and closed.
Vast’s announcement comes on the heels of the disclosure that it entered into a consent order with the Office of the Comptroller of the Currency. The consent order, signed in October, settled the cease-and-desist proceedings initiated by the OCC.
The OCC had alleged that the $1 billion-asset bank had engaged in unsafe or unsound practices tied to capital, liquidity risk and interest rate management, IT controls and risk management for new products.
The order requires Vast to form a compliance committee and submit a revised written capital and strategic plan that covers at least three years. It must also submit written programs that cover areas such as liquidity risk management, interest rate risk and custodial control.
A required risk governance plan will outline plans for adding new products and services, along with modifying or expanding existing offerings. That plan must include details for monitoring third-party activities and performance.
Vast must also secure approval to pay dividends and distribute capital. The order also sets a minimum 13% total capital ratio and a 10% leverage ratio.
The bank had a total capital ratio of 4.75% on Dec. 31, according to its call report. Its leverage ratio was 2.46%.
Vast announced in November that Robert Gregory Kidd had agreed to invest $48 million into the bank’s holding company.
The bank in February 2021 successfully executed an end-to-end cryptocurrency transaction, becoming the first national chartered bank to purchase and provide digital asset custody services for customer who directly used their bank account.