Payments

Metropolitan Bank bails on crypto

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January 10, 2023

Metropolitan Commercial Bank will cease its cryptocurrency services due to "recent developments" in the industry. The bank is one of the few to directly offer such services, according to a report by CoinDesk.

"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 in a statement.

The news come on the heels of the collapse of the cryptocurrency exchange FTX and the subsequent arrest of its CEO Sam Bankman-Fried.

Metropolitan says it will only see, "minimal financial impact from the exit." Its crypto clients make up around 1.5% of its total revenue and 6% of its deposits which translate to $1 million in revenue and $342 million in deposits.

Experts have pointed out the news is a big problem for bitcoin investors, since they rely on banks to help cryptocurrency gain mainstream acceptance and when banks leave the industry it can cause the opposite effect, according to a report by Barrons.