Metropolitan Commercial Bank says goodbye to cryptocurrency. According to the company, this move will have a minimal financial impact.
Metropolitan Commercial Bank is set to exit the cryptocurrency market completely, according to statement by the bank. In its latest report to the US Securities and Exchange Commission (SEC), the bank said the move was in response to developments in the cryptocurrency industry. Including changes in regulatory policy and a strategic assessment of the state of the Bank’s business.
Gensler’s feud with cryptography
The current SEC chair, Gary Gensler, has taken frequent swings in the cryptocurrency, and this may have been a factor in the bank’s decision. Whatever the reason, the bank scaled back its crypto business.
As of March 31, deposits related to digital assets have decreased to 4% of the total, which is equivalent to $217.6 million. The Metropolitan firm has begun closing its relationships with four crypto-asset-related clients. The process is expected to close in 2023. The decision will not affect customers’ existing ability to send or receive funds from crypto-asset companies.
According to the company, this move will have a minimal financial impact.
In January, Metropolitan Bank Holding (MBH), the parent company, announced that it would stop crypto-related services. MBH blamed industry developments and regulatory pressure. The decision came in the wake of the collapse of FTX, which left large parts of the cryptocurrency industry on its knees.
Metropolitan Commercial Bank President and CEO Mark R. DeFazio said the decision will not affect the bank’s core business. Instead, it will allow for a focus on delivering “superior value to all of our stakeholders.” As of March 31, the bank had core deposits totaling $4.9 billion, an increase of $69.2 million over December 31, 2022. Net income for the first quarter of 2023 was $25.1 million, up 31.8% year-on-year, while revenue for the same period was $65.5. m, an annual increase of 21.2%.
Another leaving bank crypto
This decision by Metropolitan Bank came in the wake of recent turmoil in the banking sector. Signature Bank and Silvergate have both been heavily involved in the crypto sector. Both have now collapsed, but the role of cryptocurrency in their demise is disputed. However, many believe that the role of cryptocurrency in their downfall has been greatly exaggerated.
It’s a loss for the crypto industry, given that Metropolitan Commercial Bank, which operates banking centers in both New York City and Long Island, provides a range of commercial, business and personal banking products and services to small and mid-market, corporate and municipal clients. Its clients also include high net worth individuals.
Moreover, the bank’s global payments group is also a banking-as-a-service provider to many fintech, payments and financial services companies in the US and internationally. Metropolitan Commercial Bank claims to be a commercial bank chartered by the State of New York, a member of the Federal Reserve System and the Federal Deposit Insurance Corporation, and an equal housing lender.
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