List of Crypto Companies Become Victims Of Silicon Valley Bank Collapse

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List of Crypto Companies Become Victims Of Silicon Valley Bank Collapse. As a result of the stunning collapse of Silicon Valley Bank (SVB), many crypto companies have revealed they were affected by the collapse. SVB has long been one of the most prominent lenders to technology startups in the world.

Friday’s bank closure by the California Department of Financial Protection marked the second largest bank failure in American history after the collapse of Washington Mutual during the 2008 financial crisis.

Reporting from Decrypt, Tuesday (14/3/2023) the following series of crypto companies were also affected by the collapse of Silicon Valley banks.

Read Also: California Now Has A Crypto Fraud Tracking Tool

On Saturday, March 11, 2023, Ripple CTO David Schwartz promised the crypto payments company would issue a statement soon about how its finances were affected by the collapse of Silicon Valley Bank.

Ripple CEO Brad Garlinghouse also posted an update on Twitter on Sunday evening and revealed Ripple was exposed to the SVB collapse.

“it’s a banking partner and owns part of our cash balance,” Garlinghouse said on Twitter.

The crypto lender that filed for bankruptcy in November 2022 after the FTX collapse, has USD 227 million or the equivalent of IDR 3.5 trillion (assuming an exchange rate of IDR 15,502 per US dollar) stored in SVB, according to documents filed Friday related to the bankruptcy process BlockFi.

The fund was reportedly uninsured by the Federal Deposit Insurance Commission (FDIC) because it was in a money market mutual fund, which in itself could constitute a violation of bankruptcy laws.

BlockFi first stopped withdrawals just days after the collapse of crypto exchange FTX.

Circle, the issuer of USDC, the world’s second-largest stablecoin, announced on Friday an undisclosed portion of the cash reserves used to back USDC and tie its value to the US dollar held in Silicon Valley Bank.

The company said in a statement SVB was one of six banks it relied on to manage USDC’s cash reserves, but claimed USDC would be able to continue to operate normally.

Read Also: US Congress Questions Impact Of CBDC’s Emergence On Crypto

List of Crypto Companies Become Victims Of Silicon Valley Bank Collapse. Crypto-focused venture capital firm Pantera had an unknown amount of exposure to the SVB collapse. As recently as last month, the company counted failed banks among its only three keepers of private funds, according to a Feb. 3 SEC filing.

Pantera is among the largest crypto-focused VC firms in the world. Last year alone he raised USD 1.3 billion or the equivalent of IDR 20.1 trillion for a fund exclusively focused on blockchain-based projects.

The collapse of the Silicon Valley Bank (SVB) raises questions regarding its impact on the US economy. The bank failure is said to be the second worst in US history after the closure of Washington Mutual during the 2008 financial crisis.

President of the United States (US) Joe Biden gave the news that the collapse of the bank would not have any effect on his country’s economy.

Reported by VOA Indonesia, Tuesday (14/3/2023), Biden said his administration’s quick action at the end of the week gave Americans confidence that the US banking system was safe. Biden added that he would also ask Congress and regulators to strengthen banking regulation.

“Americans can trust that the banking system is secure. Your deposits are available there if you need them,” said Joe Biden.

On Sunday, US regulators acted after the SVB collapsed, the bank’s biggest failure since 2008, when large numbers of customers withdrew their savings as the bank suffered losses due to its securities portfolio’s underperforming.

Read Also: SEC Oversight Gets Tighter, Now Targeting Robinhood Crypto Exchange

SVB customers will have access to their deposits starting Monday, and regulators have set up a new facility to give banks access to emergency funds.

America’s central bank, the Fed, also relaxed its procedures to allow banks to borrow from emergency fund reserves.

The regulation, imposed in the aftermath of the 2008 financial crisis due to aggressive mortgage lending, will be scrutinized in the coming days. Some of those regulations were scrapped in 2018 when President Trump took office.

List of Crypto Companies Become Victims Of Silicon Valley Bank Collapse. The changes to the Dodd-Frank Act, pushed for by Republicans, raised the threshold at which banks are at risk and are under tighter scrutiny. This threshold increased from $50 billion to $250 billion. Silicon Valley Bank had $209 billion in assets at the end of last year.

Biden, the Democrat, faces a divided Congress after Republicans took control of the House in January. So, the enactment of new banking regulations may be difficult.

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