Metropolitan Commercial Bank is close to exiting completely from the cryptocurrency market with only $278.5 million in crypto-related deposits left, according to a filing with the Securities and Exchange Commission (SEC) from April 18.
“Our previously announced exit from the crypto related vertical is almost complete,” the filing states, noting that its total core deposits, excluding crypto clients, were $4.9 billion at March 31.
The New York-based bank’s parent company, Metropolitan Bank Holding (MBH), announced in January that it was terminating crypto-related services after recent developments in the industry and regulatory pressure. The decision came shortly after former-crypto exchange FTX collapsed and its founder, Sam Bankman-Fried is facing multiple fraud charges.
Metropolitan Bank served four crypto clients which accounted for around 1.5% of its total revenue, around $1 million, and 6% of its total deposits which amounted to $342 million, according to the firm’s Q3 2022 results.
U.S. banks have been cautious about serving crypto industry, after the spectacular collapse of three of the most prominent banks – Silvergate Bank, Silicon Valley Bank and Signature Bank.
In fact, another bank – Provident Bancorp – blamed the crypto winter as the primary cause for the recent banking crisis. “Over the past few months the country has witnessed a chain of events that shook the foundations of the banking industry,” wrote co-CEO Joe Reilly and Carol Houle in a shareholder’s letter dated April 18. “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,” they wrote.
This recent crisis have also left many crypto-related companies unbanked and seen several firms trying to move their banks offshore. Meanwhile, some of the domestic banks, including BNY Mellon, who are still servicing crypto-related clients, said they are taking a slower approach to taking on newer digital asset-exposed clients.
