BankProv, the holding company of the data encryption friendly bank, has revealed that it will no longer grant loans guaranteed by the digital currency mining service platform after writing off $47.9 million in loans for the whole of 2022, which are mainly guaranteed by the digital currency mining service platform.

Since Sept. 30, 2022, BankProv has largely reduced the proportion of its data portfolio made up of platform-backed securities, according to a filing with the Securities and Exchange Commission (SEC) on January 31.

As of December 30 last year, the bank had $41.2 million in digital currency-related loans, mainly $26.7 million worth of loans secured by access to the password discovery platform. Such loans "will continue to decline, because banks will no longer distribute such loans."

During the great bull market of 2021, the login password mining industry was burdened with debt and often used the mining drilling rigs they owned as collateral to cut interest rates.

Then, since 2022, the bear market in the stock market has added unoptimistic preconditions to miners, and many miners have no choice but to sell their BTC (BTC) mining machines to cover operating costs, resulting in a sharp drop in mining hardware prices.

Although prices have fallen, some banks that have launched collateralised bonds on mining machinery and equipment have been forced to withdraw some mining as collateral.

According to a previous filing by the Securities and Exchange Commission, BankProv withdrew the mining rig on Sept. 30, 2022, in exchange for $27.4 million in loan relief, resulting in a write-off of $11.3 million.

This damage may be an important reason why the bank decided to terminate the distribution of such loans, Carol Hall, chief operating officer of Provident Bank, its holding company, stressed:

As we think about 2022, we look forward to learning from it and becoming a stronger and stronger bank. Although we lost money in 2022, we have sufficient assets and a very high level of diversification by 2023.