The past year has proven to be another turbulent year for the cryptocurrency industry. From the ongoing market downturn and explorations into decentralized finance (DeFi) to the FTX scandal, no area has been left unscathed.
For some, events in space have proven unsustainable for business. Metropolitan Bank Holdings, the New York-based holding company for Metropolitan Commercial Bank (MCB), has announced that it is completely exiting the cryptocurrency space.
In its statement, the company said its decision “reflects recent developments in the cryptocurrency industry,” along with changes in the regulatory landscape regarding banks’ involvement in cryptocurrency-related businesses.
According to MCB, the process has been ongoing since 2017, and is expected to have a minimal financial impact. It currently has four active cryptocurrency-related institutional clients, which account for about 1.5% of total revenue and 6% of total deposits.
This development comes along with the ongoing FTX case proceedings that have put the cryptocurrency industry in the spotlight.
Experts expect increased scrutiny of the space by US regulators in the coming year. Especially as the Securities and Exchange Commission, Financial Accounting Standards Board and Internal Revenue Service look to increase regulation and oversight of cryptocurrencies.
On January 3, the Federal Reserve, the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC) issued a joint statement on crypto assets in light of the chaos of 2022. It also highlighted their commitment to soundness. banking practices.
In addition to FTX oversight, Binance is also being investigated for money laundering cases in US courts. This led to more scrutiny of the hedge fund’s dealings with the cryptocurrency exchange.
Despite the industry scrutiny, some industry insiders have high hopes for DeFi in the coming year.