Zerohash's Bank Charter Bid Hits OCC Speed Bump, Refiling Planned

A return is not the same as a denial

The application was returned on 17 Jul, according to OCC records cited by the company and by media reports.

Under 12 CFR 5.13 the agency may return a filing without a decision where it is materially deficient, meaning it lacks sufficient information for the OCC to reach a determination against the applicable criteria. That ends the process. It produces no adverse finding, no published reasoning and nothing to appeal because there is no decision to appeal against. OCC Bulletin 2026-27, issued on 17 Jun, sets out when the agency will return a filing early, including where products and services are not defined with particularity or where governance and compliance arrangements are incomplete.

Denial is the other route, and the OCC uses it. Wise and Bunq were both denied outright, though neither is a digital asset firm.

In a statement to Sandmark, Zerohash said the return "is an administrative process that allows us to refile this month" and "is not a substantive decision on the merits of our application". The company said the step was taken in coordination with the OCC and does not affect its current operations, which continue under existing approvals.

The practical difference is significant. A denial is a public statement of what the regulator will not accept. A return is a private one. Everyone else in the queue is left to infer the standard from a company's own account of why it was sent away, and in this case, the account arrived three weeks after the event.

Why scope is the likely sticking point

The original application, filed on 2 Mar, sought a broad set of permissions: custody of digital assets and fiat currency, custodial staking and validation, transfer agent services, trade execution and stablecoin management, plus settlement, clearing and escrow.

That breadth is what objectors attacked. The Independent Community Bankers of America, which represents smaller US banks, wrote to the OCC on 1 Apr urging denial or deferral. Its central argument was statutory: 12 USC 27(a) limits national trust charters to institutions predominantly engaged in trust and fiduciary activities, and a firm offering trade execution and stablecoin management is not obviously that. The letter also argued the structure enabled regulatory arbitrage and that the OCC's approval pace was outrunning its policymaking. The Bank Policy Institute, the trade body for the largest US banks, filed a separate objection on the same statutory ground. The same argument was made against Coinbase's charter in April.

Zerohash's own account of the refile now points in the same direction as those objections, without conceding them. "We have since decided to take a sequenced approach to the authorization of services, with a more focused approval of national trust activities aligned with our intended rollout timeline," the company said.

Two things are worth separating in that sentence. The company presents the narrowing as its own commercial sequencing rather than a regulatory requirement, and nothing in the public record contradicts that. But "a more focused approval of national trust activities" describes a filing pulled back towards exactly the category 12 USC 27(a) requires an applicant to be predominantly engaged in.

Those two explanations produce an identical filing. If the refile drops trade execution and stablecoin management, the permissions the community bankers singled out as non-fiduciary, nobody outside the OCC will be able to tell whether the company was sequencing or complying. The statement does not say which permissions go, does not give a refile date beyond this month, and does not address the predominance argument.

Who else has an expansive application

The OCC conditionally approved Circle, Ripple, Paxos, BitGo and Fidelity Digital Assets in December, Coinbase in April, and Stripe's Bridge and Crypto.com since. Still outstanding are applications from Morgan Stanley, Payoneer, Nomura's Laser Digital and World Liberty Financial, the venture backed by the family of US President Donald Trump.

If the predominance test is now being applied with force, the applications most exposed are those asking for the widest activity lists rather than those with the most contentious owners. That is a different sorting from the political one, and it would mean the binding constraint on the OCC's crypto chartering programme is statutory rather than political.

Zerohash itself is not much damaged. It already holds a state trust charter, and the company says its existing operations, including the E*Trade relationship, do not depend on federal approval. What it has lost is time, and the ability to describe itself as federally chartered while competitors can.

Asked about the Zerohash application, the OCC declined to comment on the record. In a background response, it supplied material about its de novo chartering programme and directed Sandmark to its Corporate Applications Search tool, where returns and denials can be queried separately. It did not confirm the return date, comment on the grounds, or address the planned refile.

The material it supplied is instructive on its own terms. The OCC says it has received 40 de novo charter applications since 2025, approved 21 and denied two, and that the remaining applications are under consideration. Those figures leave no place for a returned application, which is neither approved, denied, nor still being considered. The agency's summary of its own record has no category for what happened here.

The same material says the OCC targets 120 days for reaching decisions on applications, citing a congressional duty to act in a timely manner. Zerohash filed on 2 Mar and its application came back on 17 Jul, 137 days later, without a decision. The refile will start that clock again.