Metropolitan Commercial Bank is to end crypto-related services because of "recent developments" in the digital asset industry.
One of the few U.S. banks to openly serve the crypto industry in recent years, the New York-based lender's parent, Metropolitan Bank Holding (MCB), announced the decision to exit the crypto-asset related vertical on Monday.
"This decision follows a careful review by the Board of Directors and management and reflects recent developments in the crypto-asset industry, material changes in the regulatory environment regarding banks’ involvement in crypto-asset related businesses, and a strategic assessment of the business case for MCB’s further involvement at this time," the bank said.
It is likely the bank is referring to the ongoing fallout from the collapse of crypto exchange FTX late last year and concerns that any financial firms servicing the industry will be subject to sterner regulatory oversight in the future as a result.
The bank said it expects "minimal financial impact from the exit." Its four crypto clients accounted for around 1.5% of its total revenue and 6% of its deposits. These figures equate to around $1 million in revenue and $342 million in deposits, based on the firm's Q3 2022 results reported in October.
UPDATE (Jan. 9, 12:48 UTC): Adds approximations for MCB's crypto-related revenue and deposits, as well as additional context.
The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.
Learn more about Consensus 2023, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to consensus.coindesk.com to register and buy your pass now.