Cryptocurrency exchanges must seek other options for short-term cross-border liquidity in light of an international wire transfer freeze.
It was announced on January 14, 2017 that the Metropolitan Bank Holding Corp, a liquidity provider to various cryptocurrency exchanges, has frozen any cross-border wire transfers related to cryptocurrencies.
Amid questions of compliance verification, and accusations of fraud against one of the bank’s clients, it has been widely reported that Metropolitan will cease to support international wire transfers that have anything to do with cryptocurrency transactions. Counted among Metropolitan’s clientele is the popular cryptocurrency exchange Coinbase, although what effects the freeze has had on the exchange remain unclear.
Thus far it is unknown if and when the bank will restore transfer services, and there is uncertainty about the fate of money residing in international clients’ accounts. The freeze affects the international activities of funds based in the US, possibly complicating the ability to give investors access to their capital, and non-US-based funds might have to close shop.
Metropolitan’s clients aren’t the only ones who might be negatively affected by this wire freeze; since recently holding an initial public offering during November 2017, the growth of the Metropolitan, which sold itself to investors by sporting a soft approach to cryptocurrencies, might itself be stunted.
Neither Coinbase nor Metropolitan immediately responded to inquiries for comments. As more develops on this story ETHNews will provide updated coverage.
Jeremy Nation is a writer living in Los Angeles with interests in technology, human rights, and cuisine. He is a full time staff writer for ETHNews and holds value in Ether.
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