New York-based Metropolitan Commercial Bank (MCB) is to exit all crypto-asset related activities by the end of this year, it announced this week.
The bank said it had made the decision following a “careful review” of its activities in the digital assets market.
In a statement, MCB added that the move “reflects recent developments in the crypto-asset industry, material changes in the regulatory environment regarding banks’ involvement in crypto-asset related businesses, and a strategic assessment of the business case for MCB’s further involvement at this time”.
The bank has established itself in the digital payments and cryptocurrency markets since it listed on the New York Stock Exchange in 2017. However, over the past five years the bank has been moving away from crypto as a growth market, according to president and CEO Mark DeFazio.
He added that its crypto-related activities had “never exposed the company to material financial risks”. Crypto-asset activity makes up just 1.5% of the bank’s revenue and 6% of the total value of all deposits.
MCB made the announcement after a volatile year for cryptocurrencies and other digital assets.
The collapse of cryptocurrency trading platform FTX last year has sent digital currency markets falling.
While US banks were largely unaffected by the fallout, according to the Office for the Comptroller of the Currency, banking sector regulators kicked off 2023 with a strong warning that crypto markets posed a potential contagion risk.
Regulators said they planned to take a “careful and cautious approach” to their oversight of banks’ activities in digital asset markets.