Metropolitan Commercial Bank is saying goodbye to crypto. The move will have minimal financial impact, according to the company.
Metropolitan Commercial Bank is set to exit the cryptocurrency market completely, according to a statement by the bank. In its recent report to the US Securities and Exchange Commission (SEC), the bank said that the move comes in response to developments in the cryptocurrency industry. Including changes to regulatory policy and a strategic assessment of the bank’s business case.
Gensler’s Feud with Crypto
The current SEC chair, Gary Gensler, has taken repeated swings at cryptocurrency, and this may have been a factor in the bank’s decision. Whatever the reason, the bank has pared down its crypto business.
As of March 31, digital asset-related deposits had fallen to 4% of the total, equivalent to $217.6 million. Metropolitan has begun closing down its relationships with four crypto-asset-related clients. The process is expected to wind up in 2023. The decision will not affect customers’ existing ability to send or receive funds from crypto-asset firms.
According to the company, the move will have minimal financial impact.
In January, Metropolitan Bank Holding (MBH), the parent company, declared the cessation of crypto-related services. MBH blamed industry developments and regulatory pressure. The decision followed the implosion of FTX, which left large parts of the crypto industry on its knees.
Metropolitan Commercial Bank’s president and CEO, Mark R. DeFazio, said that the decision would not impact the bank’s core business. Instead, it would allow a focus on delivering “superior value for all of our stakeholders.” As of March 31, the bank had core deposits totalling $4.9 billion, an increase of $69.2 million from December 31, 2022. Net income for the first quarter of 2023 was $25.1 million, up 31.8% YoY, while revenues for the same period were $65.5m, a YoY increase of 21.2%.
Another Bank Leaving Crypto
This decision by Metropolitan Bank follows recent tumult in the banking sector. Signature Bank and Silvergate both had extensive involvement with the crypto sector. Both have now collapsed, but the role of crypto in their demise is in dispute. However, many believe that the role of crypto in their fall has been grossly overstated.
It is a loss for the crypto industry, given that Metropolitan Commercial Bank, which operates banking centers both in New York City and on Long Island, provides a range of business, commercial, and personal banking products and services to small, middle-market, corporate, and municipal clients. Its customers also include high-net-worth individuals.
Moreover, the bank’s global payments group is also a banking-as-a-service provider to various fintech, payments, and money services firms in the US and internationally. Metropolitan Commercial Bank purports to be a New York State-chartered commercial bank, a member of the Federal Reserve System and the Federal Deposit Insurance Corporation, and an equal housing lender.
