Metropolitan Bank Stops all International Wire Transfers Relating to Digital Coins
Exclusive report from Fortune leaks news
An exclusive report by Fortune has said that any wire transfers taking place through Metropolitan Bank would be stopped. This move by Metropolitan Bank Holding Corp would also affect any deposits relating to cryptocurrency. Thus far, it has been confirmed the story is true. This is quite unfortunate since the bank built its name on the cryptocurrency boom.
The Story Was Confirmed
Fortune was able to trace a customer of the Metropolitan Bank, who received notification from the bank indicating that this was what they were doing. According to the notification the customer received, Metropolitan Bank was “ceasing all international crypto-related wire transfers to and from” with immediate effect.
According to the customer, the reason given was that the bank was not able to verify whether those international wire transfers complied with banking laws. This is because cryptocurrency accounts are anonymous and near impossible to track. They took this measure after a client of the bank was involved in an international fraud incident. However, the bank did not give details regarding the exact nature of this incident.
Who Will Be Affected
One of the biggest clients to be hit by this move will be Coinbase. They are amongst the biggest exchanges for Bitcoin and other crypto coins. People use it for deposits, transfers, and the Shift Bitcoin debit card. All of that now is in jeopardy following this move for any international transactions.
The bank is yet to provide any more information or guidance regarding their decision. For instance, they have not verified what will happen to the money held by international clients in their bank. They declined to comment when contacted.
Why This Move Matters
For one, the bank has been growing rapidly since its IPO in November. This was partly driven by its friendliness to the crypto-coin market. Some had even dubbed it the Bitcoin Bank. This latest move has the potential to curb its growth in this space, though.
Besides this, US funds that conduct business with the bank on behalf of international clients, and who hold money from investors, will not be able to return this money. Thus, all investment firms that have accounts with the bank are in a precarious position.
Also, many non-US funds manage money from international investors via the bank. They will now have to stop or shutter all operations with their clients in the US.
Another reason why it matters is that its stock could nosedive after this stunt. This is especially dangerous since the management is still in the post-IPO lock-up period.
Alternatives to Metropolitan Bank
Despite this move, customers that operated accounts with the bank still have alternatives. Some of these banks include Cross River Bank and Silvergate Bank. In short, crypto coin traders must learn to diversify the banks they use to reduce risk to their investments. At the time of writing, Coinbase has as yet made no comment regarding this move.
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How will this move affect the cryptocurrency market? Leave us your thoughts in the comment section.