Noble Bank no Longer Profitable, Looking for a Buyer
Noble Bank International, the Puerto Rican financial services firm whose clients were some of the biggest names in the cryptocurrency world, is looking for a buyer as it’s no longer profitable. The report from Bloomberg cited an unnamed source October 2, 2018.
Seeking a Sale
Puerto Rico-based Noble Bank International is reportedly looking for a buyer due to the company’s profit woes.
In an October 2, 2018, report, Bloomberg cited a “person with direct knowledge of the situation” as saying that the company has lost many of its prominent customers, including Bitfinex and Tether. According to the source, the company is no longer profitable and might be seeking a sale for a price between $5 million and $15 million.
And while the price might seem small for such an institution, the source told Bloomberg that the price is based mostly on the value of the Puerto Rican license to operate as an international financial entity.
Noble Bank attracted attention in cryptocurrency circles earlier this year as it was the only bank willing to work with both Tether and Bitfinex, which was previously dumped by Wells Fargo & Co. With the dynamic duo sharing management, it’s no wonder why both ventures were subpoenaed by the U.S. Commodity Futures Trading Commission (CFTC) in December 2017.
Reportedly, 1the regulator examined whether Tether has more than $2 billion in customer money to back its virtual coin. Around the same time, Noble faced an audit from Puerto Rico’s chief bank regulator, but neither the bank nor Tether and Bitfinex were publicly accused of any wrongdoing.
The report continued to explain that despite Tether releasing an analysis of its bank accounts in June 2018, the public wasn’t convinced that the company’s business practices were entirely legal. The lack of a full, public audit has left investors wondering whether the two British Virgin Island companies artificially boost the price of cryptocurrencies.
According to Finance Magnates, the influx of cryptocurrency and blockchain companies to Puerto Rico was mirrored by the increase in the money held by the country’s financial institutions. International financial entities located in Puerto Rico held $191 million in 2016 and $3.3 billion by the end of 2017.
This seventeen-fold increase has prompted the territory’s Department of Economic Development and Trade to establish the “Blockchain Advisory Council” back in March 2018, whose aim was to filter crypto projects for their legitimacy.
However, the popularity of crypto ventures in Puerto Rico seems to have dropped along with the value of the crypto market, with Bloomberg reporting that the amount of money held by international financial entities in Puerto Rico dropped to $2.6 billion by July 2018.
Bloomberg also cited an unnamed source saying that the majority of that money on the island was held by Noble, which could it explain the rumors about the company’s insolvency. Another clue that could prove the rumors true is another source claiming that Noble no longer has a banking relationship with Bank of New York Mellon Corp., which would mean that the bank currently functions without a custodian.