Today, Metropolitan Commercial Bank announced that it plans to withdraw from servicing clients in the crypto asset sector following a review by its board of directors. He cited the drivers as “recent developments” in the crypto asset sector, presumably including the collapse of cryptocurrencies and bankruptcies like FTX, as well as significant moves on the regulatory front. Crypto only represents a small part of Metropolitan’s business.

Metropolitan, with total customer deposits of $5.7 billion as of the end of Q3 2022, said crypto-asset businesses accounted for 6% of deposits (about $350 million) and 1.5% of revenue. with four institutional clients related to crypto assets.

Last week, Silvergate, the bank most exposed to the cryptocurrency sector, reported that it did indeed have a run on the banks in the fourth quarter, with customer deposits of digital assets falling by around $8 billion or 68% during the quarter. As a result, it is cutting 40% of its workforce, but the bank is liquid and remains committed to the sector so far.

As for the largest competitor, Signature Bank, its digital asset clients accounted for deposits of $23.4 billion or 23% of its total as of November last year, and it plans to reduce that proportion.

Meanwhile, Metropolitan wished to emphasize that it does not make loans to these customers, does not hold cryptocurrency, or trade cryptocurrency for customers.

“Today’s announcement of our exit from the cryptocurrency-related assets vertical represents the culmination of a process that began in 2017, when we decided to move away from cryptocurrency and not grow the business,” said Mark R. DeFazio, president and chief executive officer. MCB Executive. “Cryptocurrency-related customers, assets and deposits have never represented a significant part of the Company’s business and have never exposed the Company to significant financial risk.”

Earlier this year, the Federal Reserve, OCC, and FDIC issued another joint warning to banks about the risks of the crypto-asset sector.