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(Kitco News) – The Metropolitan Bank Holding Corp. has become the latest victim of the crypto winter as the holding company for New York-based Metropolitan Commercial Bank (MCB) has announced that it will be closing down its cryptocurrency unit.
According to a press release distributed by the bank, MCB currently has four active institutions that account for roughly 1.5% of total revenues and 6% of total deposits, so the financial impact from exiting this vertical will be minimal. Services offered to these clients include providing debit cards, payment and account services.
MCB said that this decision “reflects recent developments in the crypto-asset industry,” and was also influenced by changes in the regulatory landscape in regard to banks’ involvement in crypto-asset-related businesses.
The bank has already begun the process of closing out the relationships that it has with crypto-related accounts and expects the processes to be completed during 2023. It currently has no loans outstanding to any of these clients 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 the current ability of customers to transact with crypto-asset companies they choose to do business with or affect MCB’s service to customers who do not have crypto-asset-related activity as a principal line of business.
“Today’s announcement of our exit from the crypto-currency related asset vertical represents the culmination of a process that began in 2017, when we decided to pivot away from crypto and not grow the business,” said Mark R. DeFazio, President and CEO of MCB. “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 financial risks.”
The move from MCB comes as companies dealing with the crypto industry have 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 be focusing on crypto regulations and increasing their oversight in 2023.
Crypto banking has also come under increasing pressure in the wake of FTXs’ collapse and the contagion events it has sparked. Last week, the California-based Silvergate bank, which specializes in serving cryptocurrency companies, announced that it was laying off 40% of its workforce and was forced to conduct a debt sale in order to stay in business.
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