Morgan Stanley's infrastructure partner Zerohash rebuffed in pitch to be U.S. trust bank

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."