Last month (January 2023), Metropolitan Bank put out a press release titled “Metropolitan Bank Holding Corp. to Exit Crypto-Asset Related Vertical“. This has been covered by various outlets (see, for example, Reuters, Businesswire, and Coindesk) but to my knowledge, it has received no coverage in the credit/debit card reward blogosphere. So, yes, I am eventually covering the topic.
Now, to everyone’s credit, crypto doesn’t have the hype it had a year or two ago. I myself have written several warning posts on crypto (see, for example, Another Crypto Catastrophe Warning and Is There Still a Crypto Play Left?). Additionally, it is well documented that crypto debits took a huge nerf all across the board (see, for example, Crypto.com Card Nefred and Useless and RIP The Greatest Card Ever) so the whole topic isn’t very interesting anymore.
Anyway, here is the key statement from the Metropolitan Bank’s press release:
The Company expects minimal financial impact from the exit of this vertical. MCB currently has four active institutional crypto-asset related clients that in the aggregate currently account for approximately 1.5% of total revenues and 6% of total deposits. MCB’s relationships with these clients are limited to providing debit card, payment and account services. The Company has no loans outstanding to any of these clients, does not hold crypto-assets on its balance sheet and does not market or sell crypto-assets to its customers. MCB has commenced the process of closing out its relationships with these clients in an orderly fashion and expects that process to be completed during 2023.
So the question is – who is going to be impacted by this? The biggest player that will be impacted is most likely Crypto.com as CDC debit cards are currently issued by Metropolitan Bank. The minor player affected by this is Unbanked and its white-label partners. In other words, this will affect Unbanked’s Blockcard, StormX’s debit card, and Litecoin’s debit card (this card provides no reward).
Citing the aforementioned Businesswire article, StormX announced that their debit cards will be paused until a suitable banking partner is found:
2022 and 2023 continue to be full of headwinds and challenges for the crypto industry. StormX has weathered this and remained strong but our partner bank has decided to exit all crypto related programs which means we are in the process of transitioning the StormX Prepaid Card off of Metropolitan Commercial Bank. This will require closing the accounts (Date TBD) while we source and onboard a new partner bank StormX and our partners have been on a proactive search for a new sponsor bank prior to this announcement and have had several productive meetings but at this time do not have a timeline for when we will be back in the market.
Closing Thoughts
Metropolitan was one of the few U.S. banks that issued crypto prepaid debit cards for crypto companies (with others including the like of MetaBank and Sutton Bank). They all have their own policy on how they process certain charges so we will see how this goes. Also, with regulators (finally) doing something about the crypto shitshow, some players may not have as easy of a time finding a new appropriate bank.
