• Metropolitan Bank Holding Corp. announced on January 9th that it will close its cryptocurrency unit by 2023.
• The reason for leaving the crypto asset vertical is recent developments in the crypto-asset industry and changes in banks‘ regulatory environment.
• MCB currently has four active institutions, making up 1.5% of its revenues and 6% of its deposits.
On January 9th, Metropolitan Bank Holding Corp. (MCB) announced its plans to fully exit the crypto-asset related vertical. MCB is the holding company for Metropolitan Commercial Bank and is based in New York. The company cited recent developments in the crypto-asset industry, as well as changes in the regulatory environment regarding banks, as reasons for leaving the crypto asset vertical.
Currently, MCB has four active institutions that make up about 1.5% of its revenues and 6% of its deposits. According to the firm’s Q3 2022 income report, these figures equal approximately $1 million in revenue and $342 million in deposits. The services provided by MCB to its clients included debit cards, payment processing, and account management.
The president and CEO of MCB, Mark R. DeFazio, commented on the news: “Crypto-related clients, assets, and deposits have never represented a material portion of the Company’s business and have never exposed the Company to material risk.” He went on to say: “We believe the decision to exit this vertical is in the best interests of our shareholders, customers, and staff and will allow us to focus on our core banking services and related products.”
MCB is not the first bank to leave the crypto-asset industry. Other banks, such as Goldman Sachs and JP Morgan have also ceased their cryptocurrency-related operations. The widespread closure of crypto-asset services provided by banks is largely due to the lack of regulatory clarity and the risk of non-compliance with the existing regulations.
In the future, it is expected that banks and other financial institutions will re-enter the crypto-asset industry once the regulations become clearer. Until then, MCB will continue to focus on providing core banking services and related products to its customers.