Stock trading start-up Robinhood has taken a step back from its earlier ambition to become a federally insured bank.
The California-based firm has withdrawn its bank charter application with the US Office of the Comptroller of the Currency.
According to media sources, the move was voluntary.
A company spokesperson told CNBC: “Robinhood will continue to focus on increasing participation in the financial system and challenging the industry to better serve everyone.
“We appreciate the efforts and collaboration of all the parties we worked with throughout this process.”
The company submitted its application earlier this year.
Robinhood offers commission-free stock and cryptocurrency trading through its app. Earlier this year, the company raised $323min a funding round increasing its valuation to $7.6bn, reported Reuters.
Recently, several tech firms in the US faced roadblocks while trying to foray into the banking sector due to increasing regulatory concerns.
The company aims to establish a Utah-chartered bank that will offer local students with educational loans and services.
If the company receives regulatory nod, Nelnet Bank will operate as an internet bank with offices in Salt Lake City. Nelnet first filed its application in June last year and withdrew it to make an improved resubmission.