FHLBank: Silvergate did not stop lending

According to reports, the San Francisco Federal Housing Loan Bank (FHLBank) provided $4.3 billion to Silvergate at the end of last year, and did not force Silvergate to repay the advance payment. This is rumored to be the reason why the cryptocurrency friendly bank entered voluntary liquidation. A spokesman for the bank said, “FHLBank San Francisco has not requested or forced Silvergate Bank to prepay its outstanding prepayment. Silvergate has decided to prepay the outstanding prepayment based on its own assessment of its own situation.”

Interpretation of this information:

The message suggests that Silvergate, a cryptocurrency-friendly bank, received $4.3 billion from the San Francisco Federal Housing Loan Bank (FHLBank) at the end of last year, and was not required to repay the advance payment. However, the bank decided to enter voluntary liquidation despite not being forced to repay the prepayment. It is unclear as to why the bank chose this route, and a spokesman for the bank maintains that the decision was based on the bank’s own internal assessment of its situation.

The fact that FHLBank did not force Silvergate to repay the prepayment, coupled with the bank’s decision to enter voluntary liquidation, raises several questions about what may have prompted this move. One possible interpretation is that Silvergate faced financial difficulties and decided to liquidate its assets, including the prepayment from FHLBank, in order to generate cash and pay off its debts. Another possibility is that Silvergate wanted to exit the banking industry altogether, and used the FHLBank prepayment as a means to accelerate its exit strategy.

The message also highlights the fact that Silvergate is known for its friendly approach towards cryptocurrency businesses. It is possible that the bank’s exposure to the volatile cryptocurrency market may have contributed to its decision to enter liquidation. Moreover, the message raises concerns about the stability of the cryptocurrency industry, and suggests that banking institutions that rely heavily on cryptocurrency business may be at greater risk of financial instability.

In summary, the message suggests that Silvergate received a large prepayment from the FHLBank, which was not required to be repaid, and subsequently chose to enter voluntary liquidation. The reasons for this move are unclear, but could be related to financial difficulties or a strategic decision to exit the banking industry. The message also highlights the bank’s approach towards cryptocurrency businesses and raises concerns about the stability of the cryptocurrency industry.