Metropolitan Commercial Bank Ends Crypto-Related Services

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(Kitco News) – The Metropolitan Bank Holding Corp. became the latest victim of the crypto winter as the holding company of the New York-based Metropolitan Commercial Bank (MCB) announced that it would shut down its cryptocurrency unit.

According to a press release issued by the bank, MCB currently has four active institutions which account for approximately 1.5% of total revenue and 6% of total deposits, so the financial impact of exiting this vertical will be minimal. The services offered to these customers include the provision of debit cards, payment and account services.

The MCB said the decision “reflects recent developments in the crypto-asset industry” and was also influenced by changes in the regulatory landscape regarding banks’ involvement in crypto-asset-related activities. .

The bank has already begun the process of closing the relationships it has with crypto-related accounts and expects the processes to be completed in 2023. It currently has no outstanding loans to any of such customers and does not hold crypto-assets on its balance sheet or facilitate the sale of crypto-assets to its customers.

MCB said this development does not affect customers’ current ability to transact with the crypto-asset companies they choose to do business with or affect MCB’s service to customers who do not have activity related to crypto-assets as the main line of business.

“Today’s announcement of our exit from the cryptocurrency-related asset vertical represents the culmination of a process that began in 2017, when we decided to move away from crypto and not not grow the business,” said Mark R. DeFazio, president and CEO of MCB. “Crypto-related customers, assets, and deposits have never represented a significant portion of the company’s business and have never exposed the company to significant financial risk.”

MCB’s move comes as companies dealing with the crypto industry come under increasing scrutiny from regulators in the United States following the collapse of FTX. The Securities and Exchange Commission, Financial Accounting Standards Board, and Internal Revenue Service have all signaled that they will focus on crypto regulation and strengthen their oversight in 2023.

The crypto-bank has also come under increasing pressure following the collapse of FTX and the contagion events it triggered. Last week, California-based bank Silvergate, which specializes in servicing cryptocurrency businesses, announced that it was laying off 40% of its workforce and was being forced into a debt sale in order to stay in business.

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