Crypto Chaos Snags Wall Street’s Lender of Next-to-Last Resort

A Depression-era backstop that Wall Street banks use for short-term funding is the latest corner of traditional finance to be ensnared by upheaval in the crypto industry.

For decades, the Federal Home Loan Bank System has been a preferred option for lenders in need of cash. But recent revelations that some of the money went to crypto-friendly banks after the collapse of digital-asset exchange FTX is stoking concerns of mission creep, with funds going far afield from the home loans that the program was originally designed to boost.