Zerohash, the Chicago-based crypto infrastructure firm that handles backend digital-asset operations for Morgan Stanley's E*Trade platform, has had its application for a federal U.S. trust bank charter returned by the Office of the Comptroller of the Currency. The OCC returned the filing on July 17, citing “material deficiencies” — a procedural step short of an outright denial, but one that effectively ends this version of the bid.
Under Comptroller Jonathan Gould, the OCC has increasingly used returns rather than denials for incomplete crypto-charter applications. A return typically means the filing lacked information the agency needed, or that the applicant's responses to follow-up inquiries fell short of what regulators required to assess the request — a lower bar to clear than a formal rejection, but one that still sends the applicant back to the drawing board.
Crypto plumbing for E*Trade
Zerohash describes itself as providing “crypto plumbing” for major financial institutions, and its most prominent client relationship is with Morgan Stanley's E*Trade, where it handles the backend cryptocurrency operations behind the brokerage's digital-asset offering. A person familiar with the arrangement said E*Trade's relationship with Zerohash does not depend on the company obtaining a federal charter, meaning the setback is unlikely to disrupt that existing business even as it complicates Zerohash's broader ambitions.
Why the application stumbled
Zerohash's original filing covered what the company itself has acknowledged was an overly broad scope — “a wide range of digital asset and fiduciary services” — a breadth that may have made it harder for the OCC to evaluate against its usual criteria. The bid also arrived amid unrelated compliance turbulence: Edgar Guerra, Zerohash's former chief compliance officer, has filed a California wrongful-termination lawsuit claiming he had identified more than 200 significant compliance gaps at the company, including deficiencies in anti-money-laundering controls.
The broader charter wave Zerohash was competing in has also drawn outside scrutiny. The Independent Community Bankers of America filed an objection during the review period noting that the OCC had approved eleven crypto-related trust charter filings in under 100 days, questioning whether that pace allowed for “deliberate, transparent policymaking.”
Related: OCC Says Crypto Firms Should Have a Path to National Bank Charters
A crowded charter race
Zerohash was the eleventh company to file for or receive an OCC national trust bank charter in an 83-day stretch that began when the OCC conditionally approved Circle's First National Digital Currency Bank and Ripple National Trust Bank as new entities, alongside conversions from BitGo, Fidelity Digital Assets and Paxos. Bridge, Crypto.com, Protego, Morgan Stanley and Payoneer followed in the same window, underscoring just how competitive — and closely watched — the race for federal crypto banking status has become.
Zerohash said it plans to refile by the end of the month with a narrower application focused on “national trust activities aligned with our intended rollout timeline,” and expressed optimism about receiving a “swift review” of the resubmission.
