Last year turned out to be another turbulent year for the cryptocurrency sector. From a long-lasting market crash and exploits in decentralized finance (DeFi) to the FTX scandal, no sector was unscathed.
For some, events in space proved unsustainable for business. Metropolitan Bank Holding Corp, the holding company of New York-based Metropolitan Commercial Bank (MCB), announced that it is exiting its crypto asset vertical entirely.
In his statement, The corporation said its decision “reflects recent developments in the crypto-asset industry,” along with changes in the regulatory landscape regarding banks’ involvement in crypto-asset-related businesses.
According to MCB, the process has been ongoing since 2017, and it expects little financial impact. It currently has four active crypto-related institutional clients, representing around 1.5% of total revenue and 6% of total deposits.
This development comes alongside the ongoing FTX case proceedings that have kept the spotlight on the crypto industry.
Experts predict increased scrutiny from US regulators towards this sector in the coming year. Especially since the Securities and Exchange Commission, the Financial Accounting Standards Board, and the Internal Revenue Service are trying to increase regulation and supervision of cryptocurrencies.
On Jan. 3, the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and Office of the Comptroller of the Currency (OCC) released a joint statement on crypto assets in light of the chaos of 2022. It also highlighted their commitment to sound banking practices.
In addition to oversight over FTX, Binance is also being investigated for money laundering in US courts.. This has led to further examination of the hedge funds’ relationships with the cryptocurrency exchange.
Despite the industry scrutiny, some industry insiders have high hopes for DeFi in this coming year.
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