Business Wire

Feds Could Bank $50M From Seized Bitcoin Auction

Metropolitan Bank Holding Corp., the financial company used by the cryptocurrency industry for wire transfers and deposits, is no longer providing international wire transfers of cryptocurrency.

Fortune, citing a Metropolitan Bank customer, reported an immediate halt of services for cryptocurrencies related to international wire transfers. The customer told Fortune the shutdown was due to compliance issues in the verification of cryptocurrency accounts. The move was reportedly due to an international fraud incident involving one of the bank’s customers. The report noted Coinbase is one of the cryptocurrency companies that uses the bank for wire transfers, deposits and for the Shift bitcoin debit card.

Metropolitan hasn’t said whether or not it plans to restore its services for the digital currency market, nor is it clear what will happen to the money that international clients have held with the bank. The report noted that ever since Metropolitan Bank went public via an initial public offering in November, it has been growing – in part because it has embraced cryptocurrencies. If it halts operations in that business, its rapid growth of recent weeks could slow down.

The bank’s move comes around the same time the Feds are seeking to put nearly 4,000 bitcoins – currently worth approximately $50 million – on the auction block, after the digital funds were seized in criminal, civil and administrative cases, BGR reported.

Last week, the U.S. Marshals Service said it will hold an auction in February to dispose of 3,813 bitcoins, which are valued at a sizable $52 million at today’s price. Bitcoin auctions are fairly routine for the service. In one example, the government auctioned off bitcoins seized from Silk Road-related cases in 2016. However, the recent volatility in bitcoin prices – the currency tumbled 12 percent on Thursday before regaining 7 percent of its value – means the Feds are, in theory, gambling in cryptocurrency.

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