BankProv, a crypto-proactive bank, has revealed it will no longer make loans backed by crypto mining rigs after retiring loans backed primarily by crypto mining rigs throughout 2022. bottom.
BankProv has already nearly halved the proportion of its digital asset portfolio made up of rig-backed bonds since the quarter ending September 30, 2022, according to filings with the U.S. Securities and Exchange Commission (SEC) on Jan. 31. .
The company had $41.2 million in digital asset-related loans as of December 30 last year, including $26.7 million worth of cryptocurrency mining rig-backed loans. Loans are no longer being originated and will continue to decline.”
The cryptocurrency mining industry has been seen at times pledging its mining rigs as collateral to keep interest rates down as it takes on huge debts in the 2021 bull market.
However, the ensuing bear market from 2022 has forced miners into a tough situation, forcing many to sell their Bitcoin (BTC) mining rigs that they own to cover operating costs, and to replace mining hardware. prices plummeted.
Despite the drop in prices, some banks that had issued mining rig-backed bonds were forced to seize some of the mining rigs they had secured.
According to previous SEC filings, BankProv seized a mining rig as collateral for a $27.4 million loan on September 30, 2022, resulting in a write-down of $11.3 million.
