Metropolitan Commercial Bank is an American bank that has been quite active in the crypto sphere. However, the bank has recently announced plans to change its strategy and exit the crypto industry. This decision was the result of the growing risks and difficulties faced by banks working with cryptocurrencies.
Getting started with cryptocurrencies
Metropolitan Commercial Bank started working with cryptocurrencies at the very beginning of the crypto industry. It became one of the first banks to support the BitPay platform, which provides Bitcoin payment services. In 2018, the bank became a member of the Silvergate Exchange Network (SEN) program, which allowed the bank’s customers to withdraw and deposit funds in cryptocurrencies for free.
However, after Bitcoin and other cryptocurrencies began to stabilize relatively well in the market, the risks associated with crypto investments increased. Many of Metropolitan Commercial Bank’s clients who work with cryptocurrencies have a high level of risk, which requires additional efforts and funds from the bank to protect their interests.
Reasons for leaving the crypto industry
Over the past year, Metropolitan Commercial Bank has refused to open accounts for several cryptocurrency companies because the bank considers their activities too risky. Moreover, in March 2021, the bank decided to terminate its cooperation with Cryptocurrency International Corp (CIC), which is the founder of the Bitcoin cryptocurrency.
This decision was made after one of CIC’s clients was accused of fraud and detained by the Federal Securities and Exchange Commission (SEC). This caused significant risks for Metropolitan Commercial Bank, as it could be involved in criminal cases.
In addition, the bank said that its new strategy will include a focus on other areas, such as commercial lending and other financial services. The bank believes that these areas are less risky and more profitable for its business.
By withdrawing from the crypto industry, Metropolitan Commercial Bank is making a decision that is not uncommon among banks. Many other banks have also reduced their activity in this area due to growing risks and regulatory restrictions. However, this does not mean that cryptocurrencies will become less popular or less important to the world of finance. On the contrary, the growing interest in cryptocurrencies and blockchain technologies necessitates the development of new financial instruments and services that will meet new market requirements.
Thus, Metropolitan Commercial Bank is just one of many banks that are changing their strategy towards the crypto industry. This does not indicate the disappearance of cryptocurrencies, but rather the need to develop new financial instruments and services to meet market needs.