BankProv Stops Offering Loans Collateralized With Crypto Mining Machines

The crypto-friendly bank wrote off $47.9 million in loans last year, primarily mining rig-collateralized debt.

AccessTimeIconJan 31, 2023 at 1:33 p.m. UTC
Updated May 9, 2023 at 4:06 a.m. UTC

Crypto-friendly BankProv has stopped offering loans collateralized with crypto mining machines and said its portfolio of digital-asset loans fell 50% in the fourth quarter as some impaired loans were sold and a line of credit was repaid.

The Massachusetts-based bank held $41.2 million in digital asset-related loans at the end of December. Of that, $26.7 million is collateralized with crypto mining machines, and the amount "will continue to decline as the bank is no longer originating this type of loan," holding company Provident Bancorp (PVBC) said in a Tuesday filing with the U.S. Securities and Exchange Commission.

The crypto mining industry started borrowing heavily in 2021 using mining machines as collateral and often using the funds to buy more machines. That model started breaking down along with the bear market in cryptocurrencies. Mining machine prices fell by about 85% in 2022, according to data from services firm Luxor Technologies analyzed by CoinDesk, leading to margin calls and collateral seizures when borrowers couldn't service the debt.

Through 2022, BankProv wrote off $47.9 million in net charge-offs, primarily from loans collateralized by mining rigs. It said it repossessed mining machines in September in exchange for forgiving $27.4 million of debt for undisclosed parties.

BankProv had a total of $1.42 billion of net loans at the end of December.


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups. As part of their compensation, certain CoinDesk employees, including editorial employees, may receive exposure to DCG equity in the form of stock appreciation rights, which vest over a multi-year period. CoinDesk journalists are not allowed to purchase stock outright in DCG.

Eliza Gkritsi

Eliza Gkritsi was CoinDesk's AI/crypto reporter.

Learn more about Consensus 2024, CoinDesk’s longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.