California financial regulators farm Silicon Valley Bank (SVB), which was involved in investing in startups. It is reported by Reuters.
Silicon Valley Bank ranked 16th among the largest banks in the United States, with total assets estimated at $209 billion. Reuters calls the incident the biggest bankruptcy in the United States since the 2008 crisis.
The bank was transferred under the control of the Federal Deposit Insurance Corporation (FDIC). Regulators promise customers will have access to insured deposits no later than March 13. Uninsured depositors will receive their first payments into their account next week.
How writing Financial Times, this happened due to the fact that the bank invested in securities deposits in the amount of 91 billion dollars. Due to the Federal Reserve rate hike, their value has fallen sharply and is now $15 billion lower than at the time of the deal with the bank.
The bell Remarks that in the context of the bankruptcy of SVB, the dollar-pegged cryptocurrency USD Coin (USDC) lost a lot of price – its issuing company Circle Internet Financial cannot withdraw its reserve from SVB; as well as DAI, whose reserves were partially guaranteed by the USDC.
SVB’s failure will be felt across the United States as the lender is the banking partner for half of America’s venture capital-backed tech and life sciences companies, the FT has warned.
Source: delfi
