of Metropolitan Bank Holding Corp.the parent company of Metropolitan Commercial Bank (MCB), based in New York and with $6.4 billion in assets, has announced that it will withdraw from the crypto-asset sector.
Mark R. DeFazioPresident and CEO of MCB, said the move “represents the culmination of a process that began in 2017, when we decided to exit crypto and not increase activity.”
According to in the press release, this decision is the result of “careful consideration” by the Board of Directors and management in light of:
- recent developments in the crypto industry,
- significant changes in the regulatory environment regarding the involvement of banks in crypto activities,
- and a strategic assessment of the business case for MCB’s future engagement.
MCB’s announcement follows soon after joint statement of the three US regulators – Federal Reserve, Federal Deposit Insurance Corporation (FDIC) andOffice of the Comptroller of the Currency (OCC) – on January 3rd. In it, they warned banks about the risks associated with cryptocurrencies, following the bankruptcies of several major crypto companies.
The “key risks” associated with the industry and its participants, according to the statement, include fraud and deceit, legal uncertainties, volatility, the risk of “bank execution” on stablecoins, as well as the risks associated with decentralization, contagion, and lack of maturity and sustainability in the space.
However, the MCB announcement states that,
“The financial impact of this decision on the company will be minimal.
DeFazio commented that the company is focused on growing its core business, along with “financial discipline and sound risk management.” He added that,
“Customers, assets and deposits related to cryptocurrencies have never represented a significant part of the company’s business and have never exposed it to significant financial risk.”
The bank currently has four active institutional crypto clients – and these, taken together, account for around 1.5% of total revenue and 6% of total deposits.
She further emphasized that the bank’s relationship with these particular customers is related to the provision of debit card, payment and account services, stating:
“The company has no outstanding loans to any of these customers, does not hold any crypto-assets on its balance sheet, and does not trade or sell crypto-assets to its customers.”
Therefore, the bank will conclude its business with its customers “in an orderly manner”. This process, she said, should be completed by the end of the year.
The statement clarified that the decision will not affect customers’ current ability to send or receive funds from the crypto companies they choose to do business with.
According to an announcement made in October, the company’s assets totaled $6.4 billion as of September 30, 2022, a decrease of $445 million, or 6.5%, from June 30 and an increase of $280.8 million, or 4.6%, from September 30, 2021 .
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