Massachusetts-based BankProv has stopped offering loans secured by crypto mining machines and seen its digital asset loan portfolio fall by 50% in Q4 2022.
The bank held $41.2 million in digital asset-related loans at the end of December, with $26.7 million being collateralized with crypto mining machines, which “will continue to decline” as the bank is no longer originating this type of loan, according to holding company Provident Bancorp.
The decline in the crypto mining industry and the bear market in cryptocurrencies led to a decrease in mining machine prices by 85%, resulting in margin calls and collateral seizures.
BankProv wrote off $47.9 million in net charge-offs, mostly from mining rig-collateralized loans, and repossessed mining machines in exchange for forgiving $27.4 million of debt for undisclosed parties. BankProv had a total of $1.42 billion in net loans at the end of December.
Judith Faith has been writing about cryptocurrencies and blockchain technology for over five years. She is well versed in the industry and has an extensive network of industry contacts. She is also a frequent contributor to various cryptocurrency publications. With her vast knowledge and experience, she is able to provide insightful and valuable content to her readers. Judith is also an active investor in the cryptocurrency space and has a vested interest in the success of the industry.
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