Zerohash's Trust Bank Application Returned by OCC
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- Zerohash had its application for a national trust bank charter returned by the OCC on July 17 as 'materially deficient,' ending that bid — though the company says it plans to re-file by month's end with a narrower, 'sequenced' scope starting with national trust activities
- Zerohash powers crypto infrastructure for Morgan Stanley's ETrade, BlackRock, Franklin Templeton, Stripe, Interactive Brokers, and DraftKings, and is already a state-chartered trust bank whose ETrade business does not depend on securing a federal charter
- Edgar Guerra, Zerohash's former chief compliance officer and ex-Federal Reserve regulator, is suing the firm in California alleging he was fired to mask compliance issues, claiming he and his staff identified more than 200 significant compliance gaps including in money-laundering controls
- Zerohash was pursuing new investment at a potential valuation above $1.5 billion as of May, per sources, and had been in acquisition talks with Mastercard that fell through in recent months
- The Independent Community Bankers of America objected to Zerohash's application in April, noting the OCC had received or conditionally approved 11 filings — including Circle, Ripple, Paxos, BitGo, Fidelity Digital Assets, and Crypto.com — in windows of under 100 days
Why it matters: Zerohash's 'return' is the softest possible rejection — not a formal denial — meaning the company is betting it can address what's missing and re-file for swift review. With a state trust charter already in hand and existing E*Trade, BlackRock, and Stripe relationships, the federal bid matters more for expansion scope than operational survival, but the compliance-gap allegations from a former CCO's wrongful-termination suit are now on the public record.
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