AI · CoinDesk
Morgan Stanley's infrastructure partner Zerohash rebuffed in pitch to be U.S. trust bank
Compiled by KHAO Editorial — aggregated from 1 source. See llms.txt for citation guidance.
★ Tier-1 Source
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.
Key facts
- Zerohash had lately been pursuing further investment, in May, at a potential valuation above $1.5 billion, though that was at a point in which its application to be a federally regulated trust bank
- Guerra, a former regulator at the Federal Reserve, indicated in the suit that he and his staff internally identified more than 200 significant compliance gaps, including in the firm's
- A spokesperson for the OCC didn't immediately respond to questions about the application, and spokespeople for Morgan Stanley declined to comment
- The company, which in recent months had also been in acquisition talks with Mastercard that fell through, has powered crypto infrastructure at such businesses as BlackRock, Franklin Templeton
Summary
Zerohash, a crypto infrastructure provider for high-profile firms such as Morgan Stanley’s E*Trade, failed to get approval in its initial application to join the ranks of new digital asset-focused U.S. trust banks. The U.S. Office of the Comptroller of the Currency sent the company’s application back to it in a process that suggests the regulator determined it had “material deficiencies,” so that charter bid is over, but not formally denied. The company said it’s hoping to re-apply by the end of the month with a narrower scope that it expects will get a quick review.