US banks lend $15 million to crypto-friendly companies

The devastating effects of the ongoing crypto winter are affecting crypto-centric companies. The US Federal Home Loan Bank (FHLB) system was found to bail out funds for crypto-friendly banks. So far, the bank has already disbursed more than $15 million.

Signature and Silvergate receive advances from the FHLB.

Signature And Silver Gate There are crypto-friendly entities fighting for survival among them. Crypto winter. Recently, the duo of Signature and Silvergate have been losing funds and investors due to their relationship with each other. Defective FTX Exchange and Alameda Associates.

According to ProteaBoth have received advance funding from the FHLB.

From 2021 to 2022, Signature Bailouts rose from $2.63 billion to $11.28 billion, with about $50 million in shares of New York’s FHLB.

Silvergate did not receive a loan in 2021 but was offered $4.3 billion in 2022. Also, the value of Silver Gate The stake in San Francisco’s FHLB rose from $19 million in 2021 to about $25 million in 2022.

Silvergate and Signature stock prices have fallen 75% and 20%, respectively, since November.

What is Federal Home Loan Bank?

The FHLB was created in the wake of the Great Depression and currently has over 7,000 members scattered throughout its 11 independently operating partner banks in the United States. Each of these banks operates. Backstop For each other when the debts are bad.

The purpose of FHLB Bank is to fund residential housing members, community finance systems, small farms and businesses. Its credit rating is very strong which allows the bank to provide the facility. Low interest loansAdvances to stakeholders, and profits.

To receive an advance from the FHLB, an institution must be a member of any of the FHLB Associates and hold a certain amount of stock in the FHLB system.

Recently, the bank has described itself as a liquidity provider that raises funds for global markets by lending that money in advance. The FHLB receives its funding not from taxpayers, but from private entities chartered by the government and then regulated by Congress.

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