coindesk.com
Zerohash, a crypto platform that handles the backend operations of high-profile traditional financial firms including Morgan Stanley's E*Trade, fell short last month in joining the dozens of firms who've recently been granted U.S. trust bank charters by the Office of the Comptroller of the Currency.
The banking regulator quietly returned the Chicago-based company's application, leaving the business in a singular position, left out of the OCC's recent abundance of provisional charters to trust banks seeking to handle digital assets. In two other recent cases, fintech firms were flat-out denied in their applications, but a "return" means the process was ended because the application was "materially deficient," according to OCC policy.
"The return of the application is an administrative process that allows us to refile this month," the company said in a Wednesday statement to CoinDesk. "This approach was taken in coordination with the OCC and is not a substantive decision on the merits of our application, and it does not affect zerohash's current operations, which continue under our existing regulatory approvals."
Still, the company had recently advertised jobs — including for a national trust officer and a chief operating officer — at a "Zerohash National Trust Bank" that it indicated had a "pending charter application" before the OCC. And Zerohash Co-president Stephen Gardner's LinkedIn page lists him as CEO of the "zerohash national trust bank (pending)."
For its part, Zerohash indicated that the initial OCC application may have been ambitious in the scope of the trust bank's planned operations, having covered "a wide range of digital asset and fiduciary services," the company said, adding that the next effort will take a more "sequenced" approach, starting with an application for "a more focused approval of national trust activities aligned with our intended rollout timeline."
The firm is looking forward "to swift review of the resubmission," it said.
The original effort in March joined the rush of firms hoping to be among the trust-bank provisional approvals flooding the U.S. with new crypto-oriented banks, especially amplified in the wake of the Guiding and Establishing National Innovation for U.S. Stablecoins Act that formally established a legal structure for U.S. stablecoin issuers. But Zerohash's application was sent back on July 17, according to OCC records, which don't reveal the specific cause.