According to Forbes, the Metropolitan Bank halts Cryptocurrency wire transfers. Metropolitan Bank Holding Corp (NYSE: MCB) notified its customers that it is ceasing all its international crypto related wire transfers.
The reason for shutdown, according to the Metropolitan Bank’s customer, was because the bank could not verify the compliance of international wire transfers for cryptocurrencies.
The move is alleged to be a response to an incident of international fraud associated with one of the bank’s clients. The move is highly significant and is seen to have abrupt implications in the crypto market.
Bank’s decision is important in many ways. Firstly, Bank’s move to cease crypto related international wires post its IPO can curb its growth in this industry segment.
Secondly, non-US based firms who manage international investors via Metropolitan Bank will be forced to freeze or shutter its operations.
And finally, US funds who conduct business with the bank on behalf of their international clients will have no way to return the capital.
Occasionally referred as “The Bitcoin Bank”, the fast growing & recently IPO’d Metropolitan is a favorite among the investors for transfers of cryptocurrencies.
Metropolitan is one of the predominant service provider for wire transfers, deposits & shift debit card with US-based cryptocurrency exchange Coinbase.
The bank’s official position has not yet been made clear, but prima facie it appears that the risk of inability of verification for international cryptocurrency transactions has led to this move. Introduction of Know Your Customer (KYC) regulations has increased the vigilance in the loosely monitored cryptocurrency market.
Metropolitan is yet to provide guidance on its plans to restore the service. It’s also unclear what might happen to the money that existing international clients have in the bank.
Following the Metropolitan Bank’s communication to its customers, US Treasury Secretary Steven Munich indicated that an international effort to control and manage transfers in cryptocurrency could be forthcoming. All these events give us a clear signs for stringent regulations on the horizon for cryptocurrency industry. Previously Deutsche bank had also shown their discomfort on cryptocurrencies, while praising the underlying tech.