Metropolitan Commercial Bank has almost completely left crypto business

Updated: 21 April 2023

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While many are looking for ways to enter the crypto industry and attract crypto users and community members to their business, the situation is completely reversed when it comes to the Metropolitan Commercial Bank. The bank has decided to leave the crypto industry some time ago, and while doing so has been a process, its recent filing suggests that it is approaching its end.

Metropolitan Commercial Bank wants out of crypto

The bank explained in its recent filing with the Securities and Exchange Commission (SEC) that there is only $278.5 million in crypto-related deposits left. Once this final portion has been resolved, the bank will be completely out of the crypto market.

According to Metropolitan Commercial Bank’s SEC filing, the termination of cryptocurrency-related services is almost complete, with only $278.5 million in cryptocurrency-related deposits remaining as of March 31, 2023. Beyond that, core deposits totaled $4.9 billion.…

— Wu Blockchain (@WuBlockchain) April 21, 2023

The filing said that “Our previously announced exit from the crypto-related vertical is almost complete.” As of March 31st, the bank’s total core deposits — excluding the crypto clients — sat at $4.9 billion.

The decision to terminate all crypto-related services actually came from the New York-based bank’s parent firm, Metropolitan Bank Holding (MBH). In January of this year, the company said that it would end the bank’s crypto-related services due to major developments in the industry, as well as regulatory pressure.

The major events that the company referenced likely include the collapse of FTX, which took place in November 2022, as well as the crash of numerous other businesses that were working closely with the exchange. After it was revealed that the exchange and its closest firms were mismanaging customer assets, the regulatory crackdown on crypto businesses was too much for most of the industry’s players. Since then, some have shut down, others have left the US, and some, like Metropolitan Commercial Bank, have decided to give up on working with crypto.

Metropolitan Commercial Bank's dynamite roster of clients looking more and more like Silvergate and Signature Bank here. Looks like $MCB banked a few shell companies running a crypto romance scam (aka "pig butchering") in late 2021.https://t.co/Z8ONOBjL0o pic.twitter.com/NUaPYfKdCo

— Deltec'ed (@ExkrementKoin) April 18, 2023

While the bank was still actively working with cryptocurrencies, it served four clients. Their crypto holdings accounted for 1.5% of the bank’s total revenue, which translates to around $1 million. At the same time, these clients were responsible for around 6% of total deposits, amounting to $342 million, according to the company’s Q3 2022 results.

US banks’ experiences with the crypto industry

While the US banks have always been reserved when it came to crypto, they became even more careful after the recent collapse of the three crypto-serving banks, Silvergate Bank, Silicon Valley Bank, and Signature Bank.

Another bank called Provident Bancorp blamed the crypto industry — specifically, the crypto winter — for the banking crisis. Co-CEO Joe Reilly and Carol Houle published a shareholder’s letter recently, saying, “Over the past few months the country has witnessed a chain of events that shook the foundations of the banking industry. These events came on the heels of a cryptocurrency downturn that affected many businesses, including some that we supported through our digital asset lending initiatives.”

In the aftermath of the banking crisis, a lot of crypto-related firms were left unbanked, and several of them attempted to move their banks offshore. This also served as a lesson for the banking companies only starting to onboard crypto clients, who have now decided to take a slower approach.

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