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Crypto companies and investors are among those impacted by the latest collapse of Silicon Valley Bank SIVB, which has sent tech start-ups that once relied on the bank into turmoil.
Following news of the bank’s demise on Friday, Crypto firm Circle, which has $3.3 billion of its $40 billion of USD Coin reserves at SVB, said in a Twitter post that it and USDC will continue to operate normally while the firm waits to see how SVB’s receivership will affect its depositors.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
Last week, the Boston-based firm said it had moved a “small percentage” of USDC reserve deposits held at Silvergate SI — which announced plans on Wednesday to wind down its operations and liquidate its bank — to other banking partners, according to Reuters.
In response to the latest events, cryptocurrency investors have redeemed more than $2 billion in Circle’s Stablecoin in the past 24 hours, blockchain data provider Nansen notes.
Read also: EXCLUSIVE: No, Silicon Valley Bank Collapsing Doesn’t Mean The Sky Is Falling: Here’s Why
SVB’s downfall has affected other firms as well. A bankruptcy document revealed that cryptocurrency lending firm BlockFi, for instance, has $227 million worth of uninsured funds allocated to a money market mutual fund offered by SVB. The disclosure comes just months after BlockFi halted withdrawals in the wake of crypto exchange FTX’s implosion.
Per new bankruptcy filing, BlockFi has $227m in Silicon Valley Bank. The bankruptcy trustee warned them on Mon that bc those funds are in a money market mutual fund, they’re not FDIC secured — which could be a prblm w/ keeping in compliance of bankruptcy law pic.twitter.com/hnpo8anrrS
Venture capital firm Pantera may similarly have an unknown amount of exposure to SVB’s collapse, per an SEC filing. One of the largest crypto-focused VC firms in the world, Pantera raised $1.3 billion for a fund focused on blockchain-based projects.
Blockchain Avalanche, whose native token currently boasts a market capitalization of $4.84 billion, also announced on Friday that it has over $1.6 million in exposure to SVB.
NFT collection Bored Ape Yacht Club’s Yuga Labs, in addition, shared that it had been exposed to SVB, although the exposure was “super limited.”
Nova Labs, provider of the decentralized network Helium, also said it had been exposed.
On Friday, SVB was shut down by the California Department of Financial Protection and Innovation because of “inadequate liquidity and insolvency.” The Federal Deposit Insurance Corporation (FDIC) took control of the bank via a new entity called the Deposit Insurance National Bank of Santa Clara. According to regulators, all of SVB’s deposits have been transferred to the new bank.
Read now: EXCLUSIVE: Jim Cramer Recommended SVB Financial In February, An Example Of ‘His Reverse Midas Touch’
Photo: Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.