Metropolitan Bank Stops Crypto Wires
Metropolitan Bank Holding Corp and its crypto services have been expanding rapidly after its IPO in November 2017. It is even used by the popular crypto-exchange Coinbase. Many people also like refer to the Metropolitan Bank as the “Bitcoin bank”, because it is used quite often by companies offering cryptocurrency services. Now, the bank has decided to put an end to all its international crypto-related wire transfers.
According to a Reuters report from January 16th, this might only affect crypto transfers initiated by “non-US entities”. Based on what the bank’s customers have said, the reason for the block on crypto transfers might be to stop fraudulent activity.
Reasons for the Shutdown
The owner of an investment company, who also happens to be a customer of the Metropolitan bank, told Fortune that the bank had been unable to determine whether crypto-related accounts were in compliance with the laws applicable to international wire transfers. Therefore, the bank decided to suspend all such transfers.
Some sources say that the bank’s change in policy is because one of its customers might have become a victim of international fraud. Metropolitan bank has refuted these allegations. Furthermore, the bank states that it did not even know about crypto-related cross-border transfers.
Erroneous Reports Published Online
On January 16th, the Metropolitan Bank tried to clear things up by saying that its policy of not processing crypto-related wires from non-US accounts was not new. The bank also claimed that this policy had been in effect for a long time. Also, according to the bank, one of the goals of this policy is to complement the institution’s risk management efforts.
So now who should we believe? There seem to be many different versions of this. Whatever the actual story is should come out eventually. However, the important thing to note here is that the new financial system is built through cryptocurrencies is far from perfect. There’s a lot of work that needs to be done in order for digital currencies to achieve mainstream adoption.
One Final Note
Although customers of New York’s Metropolitan bank may have been inconvenienced, they do have other options. For instance, these customers might want to try the Cross River Bank or the San Diego based Silvergate bank, because they seem to provide crypto-related services as well.
We should still keep in mind that their services might not be satisfactory, or could be subject to change abruptly given how quickly the crypto-market is evolving and its extremely volatile nature.