Jim Cramer Calls Fed Loan to Crypto Bank Dangerous Precedent

Jim Cramer, CNBC’s main Mad Money program, retweeted the news that the Federal Home Loan Bank had bailed out Silvergate, a $4.3 billion cryptocurrency bank, and called the event “dangerous.”

This is extraordinary. A rescue loan from the Federal Home Loan Bank to help a virtual currency bank stop a spill. I hope people realize how uncertain this all is. Unusual business.

The original tweet was posted by John Reed Stark, Chairman of John Reed Stark Consulting LLC. He shared an article from American Banker highlighting the fact that Silvergate received a $4.3 billion loan from the Federal Home Loan Bank in order to avoid a cash drain.

In real time, U.S. taxpayers are officially subsidizing virtual currency fraud as part of the first U.S. virtual currency savings. For example, the will die,” Stark wrote .

According to the memo, when the well-known virtual currency exchange FTX collapsed, depositors began withdrawing their funds from Silvergate Capital Corp. but the California bank obtained liquidity through a “quasi-governmental institution.”

Documents from the bank outline how it received in the fourth quarter of 2022. In fact, the bank had $4.6 billion in cash, much of which consisted of advance payments from the Federal Home Loan Bank.
Interestingly, the Mortgage Bank itself is under scrutiny as its Federal Housing Finance Agency authority is under review. Cannot read all totals. Retrying…