Metropolitan Bank Holding Corp., the holding company for the New York-based Metropolitan Commercial Bank (MCB), announced on January 9 that it would close its cryptocurrency unit by 2023.
Metropolitan Bank Holding Corp. (the “Company”) (NYSE: MCB), the holding company for Metropolitan Commercial Bank, today announced that it will fully exit the crypto-asset related vertical.https://t.co/JrTOs1y5sX
— Metropolitan Commercial Bank (@MCBankNY) January 9, 2023
While talking about the reason for leaving the crypto asset vertical, MCB cited “recent developments in the crypto-asset industry” and “changes in the regulatory environment regarding banks.”
MCB currently has four active institutions that comprise about 1.5% of its revenues and 6% of its deposits, and thus the departure will have little impact on MCB’s financials, according to the press release. Based on the firm’s Q3 2022 income report, these figures equal approximately $1 million in revenue and $342 million in deposits.
Among the services, MCB provided to its clients were debit cards, payment processing, and account management. President and CEO of MCB, Mark R. DeFazio said:
“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.”
However, MCB has assured customers this development will not affect their ability to transact with crypto-currency companies or MCB’s service to customers without crypto-asset-related activity as a principal business.
As reported, the bank currently has no outstanding loans to any of these clients, does not keep crypto assets on its balance sheet, and does not facilitate the sale of crypto assets.
The troubles of the crypto sector after Terra-Luna and FTX collapse continued this year with plummeting deposits, increasing layoffs, and legal hurdles.
For instance, more than $8 billion in crypto-related deposits were withdrawn from Silvergate Capital Corp following the collapse of FTX. Consequently, the firm sold assets at a loss to cover the bank run and laid off over 200 employees – 40% of its workforce.