MCB Announces Departure from Crypto
- MCB said the process to exit the crypto market began in 2017.
- US banks became heavily involved in crypto during the 2021 bull run.
- Crypto experts believe the industry will come under full regulation in the coming months.
Metropolitan Commercial Bank (MCB) has announced its departure from the crypto market. The New York-based bank, which is also a unit of Metropolitan Bank Holding Corp., said the decision to quit crypto was influenced by recent events in the industry and changing regulations affecting banks.
Mark DeFazio, MCB’s president and chief executive, said the decision began in 2017 and will have a minimal financial impact on the company. The Metropolitan Commercial Bank said it has four active institutional crypto-asset-related clients that account for 6% of deposits and 1.5% of its revenues. MCB further noted that it does not have any crypto assets on its balance sheet and that none of its clients with whom it deals in crypto assets had any outstanding loans from it.
Mark said in a press release,
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. We remain focused on growing our core business and delivering superior value for all of our stakeholders through high-touch, relationship-driven banking, supported by financial discipline and sound risk management.
A number of cryptocurrency businesses have filed for bankruptcy protection as they grapple with an industry-wide decline that has been worsened by the failure of Bankman-Fried’s FTX. While 2022 is generally regarded as a dark year for crypto users and traders, some old trends appear to have spilled into the new year, including declining deposits, job losses, and several legal challenges.
The collapse of FTX had a ripple effect on the industry, and last week, crypto-focused bank Silvergate Capital Corp announced a significant drop in crypto deposits in Q4 2022 due to declining industry confidence.
The FTX saga has also cast a fearful shadow on the broader crypto industry, and experts expect regulators in the United States to monitor the industry closely. The Securities and Exchange Commission, Financial Accounting Standards Board, and Internal Revenue Service are all calling for stricter policies in the industry to prevent a similar FTX situation.
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