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Metropolitan Commercial Bank (MCB), founded in 1999, describes itself as an “entrepreneurial” bank. In times where entrepreneurial banks such as SIVB and SBNY go down the drain, MCB deserves a closer look to what makes this bank “entrepreneurial”.
As so often, it turns out entrepreneurial can easily be confused with taking on (too?) high risks. The following problems are obvious at MCB:
MCB is the issuer of choice for prepaid debit cards of crypto firms
MCB announced the move away from Crypto – but is this really happening?
The bank is bleeding deposits
The balance sheet is shockingly comparable to the failed Signature Bank (SBNY)
All in all, we think MCB is a failed bank and that it will share the fate with the likes of SBNY and SIVB.
The following article shall only construe a quick summary of the most important findings from a quick research. As so often, where there is smoke there’s also fire – and many many signs of smoke can be found regarding MCB, many of which would exceed the format of a single article. We encourage anyone interested in the matter to do its own deep-dive on issues.
Issuer of choice for prepaid debit cards of crypto firms
In MCB’s Q3 investor deck, there’s a list of MCB’s payment clients. MCB’s payment product essentially consist of a digital wallet solution, tied to prepaid debit cards. Companies such as IBKR use this product amongst other renowned names, but highly questionable names find themselves on that list as well.
Source: MCB Q3 investor presentation
Monex and CiBanco, for example, were involved in investigations around transferring an amount of 1.3m pesos out of Mexico to bogus companies in 2018:
While offering prepaid products to Crypto.com is not illegal or problematic per se, the question needs to be asked why a local New York bank, mostly active in commercial real estate lending, is suddenly supporting the crypto scene. We have seen this pattern before – Signature Bank is the best example here. Here’s a hint, without spoiling the story: To acquire cheap deposits and lend them at high yields to real estate developers.
But it’s not only crypto customers that are problematic. Skrill and Paysafe, for example, are payment companies that are never far away when it comes to the grey and shady areas of the internet (mostly online gambling). In 2020, they were under investigation by the Italian law enforcement for supporting money laundering through online casinos by the Italian Ndrangetha :
