Morgan Stanley's Crypto Partner Zerohash Fails in Bid to Become US Trust Bank

Zerohash, a digital asset infrastructure provider and partner of Morgan Stanley, has been rejected in its application to operate as a trust bank in the United States. The decision marks a significant setback for the firm's ambitions to expand its institutional crypto custody and settlement services. This development highlights the ongoing regulatory hurdles facing crypto-native companies seeking traditional banking charters, even those with established partnerships with major Wall Street players. The rebuff could impact the broader market sentiment for institutional crypto adoption, as it underscores the cautious stance of US regulators towards integrating digital asset firms into the traditional financial system.