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Jim Cramer is joined by a number of investors and bystanders expressing concern over the “unprecedented” bailout.
Recently, famous CNBC host Jim Cramer gave to twitter Expressing his concern over Silvergate’s “unprecedented” bailout loan from the Federal Home Loan Bank.
“This is insane,” Kramer tweeted. “Bailout loans from the Federal Home Loan Bank to stop the runaway. I want people to know how dangerous this is getting. It’s not business as usual,” he added.
Cramer’s comments were in response to a tweet by former SEC official John Reed Stark, who said that U.S. taxpayers are now officially subsidizing “crypto fraud/fraud” in the first U.S. crypto bailout. “Thus liberty dies,” he said.
This sentiment was echoed by many social media users who expressed similar concerns about using public funds to bail out private banks engaged in cryptocurrencies. I question whether money should be used as a reward for risky investments.
Silvergate was able to raise $4.3 billion in funding from FHLB. FHLB comes after deposits started disappearing from its books after the collapse of crypto exchange FTX last year. The infusion of funds helped stave off bank runs.
FHLBs are government agencies that typically fund housing finance programs such as mortgages. It was therefore quite surprising that the institution would provide such a large loan to Silvergate, especially since cryptocurrencies are highly volatile assets. , have generally avoided it.
As reported by American Banker, some industry experts have also questioned whether funding troubled crypto-friendly banks is in the public interest.
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