According to a report from the Wall Street Journal, two crypto-friendly US banks have borrowed at least $13.6 billion from the Federal Home Loan (FHL) Banks to deal with a large number of customer withdrawals amid the digital asset bear market.
The FHL Bank System is a government-sponsored banking system created by the Federal Home Loan Bank Act of 1932, which is designed to support mortgage lending and community investment.
The Wall Street Journal reports that crypto-friendly Signature Bank borrowed $10 billion from its local FHLBank in the fourth quarter of 2022, representing the largest FHL loan by any bank in the past three years.
Signature Bank’s deposits reportedly dropped from nearly $103 billion to less than $89 billion in 2022. Additionally, Silvergate Capital borrowed “at least” $3.6 billion, according to the WSJ.
The bank, which became publicly traded in 2019, recently announced it lost $1 billion in the last three months of the bear market alone. Despite the difficult market conditions, Silvergate has stated that it still believes in cryptocurrencies.
