Metropolitan Commercial Bank ends crypto-related services

As the prolonged crypto winter continues to hit individual and institutional players in the industry, the Metropolitan Commercial Bank of New York, which provides banking solutions through its subsidiary, the Metropolitan Commercial Bank, has become the latest victim. The bank announced on January 9 that its cryptocurrency services would be discontinued immediately due to “recent developments” and regulatory uncertainty in the digital asset industry.

“The news of our exit from the cryptocurrency-related asset vertical represents the culmination of a process that began in 2017 when we decided to pivot away from crypto and not grow the business…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.”

The company caters to customers of all sizes in the crypto industry by offering debit cards, payment, and account services. While these services contribute to the bank's bottom line, they only account for 1.5% of revenues and 6% of deposits, so the bank sees little financial risk in leaving the web3 space. DeFazio stated that the bank has begun cutting ties with all cryptocurrency-related accounts and anticipates finishing the process by the beginning of 2023. In addition, he reaffirmed that no loans are currently owed to or held by the company and that the company now holds no Bitcoin or other cryptocurrencies.

For an industry already struggling through a bear market, Sam Bankman-Fried's FTX scandal, one of the most publicized bankruptcies in the blockchain world, is a heavy blow. Since the FTX crash, other crypto companies have felt the pressure. For example, Silvergate, a publicly traded crypto banking company with ties to the now-defunct exchange, had to lay off more than 40 percent of its workforce on January 6 due to the tumultuous economic crisis that caused its share price to fall by 46 percent.