Figure Technologies applied for the charter in 2020.

Figure Technologies, a blockchain startup founded by former SoFi CEO Mike Cagney, has decided not to pursue a national bank charter any longer, as confirmed by the Office of the Comptroller of the Currency. The company initially applied for the charter in 2020, hoping it would simplify its operations and enable them to reach a wider range of underserved customers.

However, Figure’s application faced obstacles when the Conference of State Bank Supervisors sued the OCC to halt its progress. According to the lawsuit, Figure’s application did not outline its strategy to obtain federal deposit insurance, and the argument was that the OCC did not have the authority to charter a full-service national bank without this insurance under the National Bank Act. (BANKING DIVE)

As a result of the lawsuit, Figure revised its application to incorporate a plan for seeking deposit insurance from the FDIC. Despite the Conference of State Bank Supervisors dropping its lawsuit, Figure never obtained the national bank charter.

A spokesperson from Figure stated that the company had chosen to withdraw the banking charter application to focus on other growth areas while partnering with established banks.

Recently, the company also faced challenges due to the macro environment and cut its staff by 20% (90 employees).

However, there is positive news on the horizon as Figure is planning to take its lending arm, LendCo, public early next year, with an anticipated $2.5 billion public valuation, according to a letter from Mike Cagney seen by Bloomberg.

Related Story: Mike Cagney-Led Figure Tech To Offer Banking-As-A-Service Via New Subsidiary