Vast Bank, a Tulsa-based financial institution, has recently been subject to increased scrutiny by the Treasury Department. As a result, a consent order was signed by the parties involved, obliging the bank to improve its internal controls and increase reporting to government. The order also affects the bank’s operations with crypto-currency.
The bank began advertising crypto accounts in 2020, though the venture only constituted less than 1 percent of its assets. Federal regulators have expressed their concern that Vast Bank is holding crypto-assets as assets for its clients. Currently, the bank holds around $2million in crypto assets.
The consent order cited unsound banking practices relating to new products, IT Infrastructure, record-keeping and liquidity. To this end, additional oversight was required, including a newly-appointed compliance panel that would report to both the board and regulators. The current bank leadership has remained unchanged.
Vast Bank has recently opened a new headquarters in downtown Tulsa, where commercial banking is the main focus. Tom Biolchini, the leader of the privately owned bank, has stated that the order is directed towards their crypto-currency venture and that the bank has made the strategic decision to exit it, with no effect on customers, except those involved in cryptocurrency.
Investors have injected a total of $48 million into the bank, ensuring that it has enough capital to last for a long time. Biolchini is confident that once regulators see that the bank is making aggressive steps to exit crypto and focus on community banking, they will be right back on track.