Nikolas Sargeant
The Metropolitan Bank Holding Corp, the holding company for Metropolitan Commercial Bank (MCB), has announced its intention to exit its crypto-asset-related vertical completely.
In a particularly turbulent year for the cryptocurrency industry, from the LunaTerra fiasco to the FTX scandal, crypto is now fully exposed and reflected in the enduring market slump.
Metropolitan Commerical Bank Exits
The negativity and lack of market activity have forced many crypto businesses to fold. Since liquidity and earnings are often intrinsically tied to the market, 2022 has proved unsustainable for companies.
In a statement released by Greg Sigrist, EVP & Chief Financial Officer of the Metropolitan Bank Holding Corp, the New York-based bank will exit its crypto-assets vertical. The statement cited the decision as one that “reflects recent developments in the crypto-asset industry.” Changes in the regulatory landscape regarding banks’ involvement in digital assets have played a significant part in the company’s decision.
The MCB claims that the process has been underway since 2017 and expects the move to have a little financial impact. The company has four active institutional crypto-asset-related clients, accounting for approximately 1.5% of total revenues and 6% of total deposits.
FTX Operations Unravel
The ongoing FTX case is the story that remains in the global media spotlight. Former CEO Sam Bankman-Fried is facing criminal charges and potentially a lengthy prison sentence. Given the number of financial scams orchestrated through digital currency, financial regulators and the courts are now imposing harsher sentences for those who are culpable.
This is bad news for Bankman-Fried and the FTX top dogs. The US Securities and Exchange Commission, Financial Accounting Standards Board, and Internal Revenue Service are looking to ramp up regulations, which many experts forecast to be the change the crypto space needs. For too long, the industry has been littered with too many rotten eggs and bad businessmen, which could change in 2023.
On January 3, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) issued a joint declaration concerning crypto resources in response to the tumult of 2022. Additionally, they displayed their adherence to sound banking conventions.
Despite the dark and gloomy outlook created by a series of damaging stories, many industry experts predict a more promising future for crypto this year, notably in the decentralized finance (DeFi) space.
