Should Investors Be Concerned Now That Banks Are Fleeing Crypto?

According to a statement issued on Monday by Metropolitan Commercial Bank's parent company, the bank will phase down its crypto-related operations this year.

The New York-based bank, which has around $6.4 billion in assets, cited “recent changes” in the market as well as a shifting regulatory climate as reasons for exiting the young area.

“Today's announcement of our disengagement from the crypto-currency related asset sector is the completion of a process that started in 2017 when we chose to pivot away from crypto and not develop the company,” Metropolitan Commercial Bank president and CEO Mark DeFazio stated.

The bank has no cryptocurrency on its balance sheet and no outstanding loans with its crypto-related customers.

The change will have “little financial effect,” according to Metropolitan Commercial Bank. It has four active crypto-related customers, accounting for around 1.5% of total income and 6% of total deposits.

“Crypto-related customers, assets, and deposits have never constituted a major percentage of the Company's operations or exposed the Company to material financial risks,” DeFazio said.

Metropolitan Commercial Bank is one of the first established financial institutions to enter the emerging market. One of their projects was the launch of a crypto debit card in 2018.

“We're obviously extremely interested in increasing this sector,” the bank's chief technology officer, Nick Rosenberg, told CoinDesk of the bank's clients in 2018. “We've discovered that it's a serious business. Some highly clever individuals are involved. Some extremely exciting concepts are emerging that have the potential to significantly alter the way people do business.”

Stay tuned for more crypto news.

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