Silicon Valley Bank, a major financial institution for venture capital firms, was shut down by California’s financial watchdog on March 10, becoming the first Federal Deposit Insurance Corporation-insured bank to fail in 2023.
The California Department of Financial Protection and Innovation confirmed that Silicon Valley Bank had been ordered closed, but did not specify the reason. The Californian regulator appointed the FDIC as receiver to protect insured deposits. .
Depositors “will have full access to their insured deposits no later than Monday morning, March 13, 2023,” the official statement said. The regulator explained that uninsured depositors will receive a “receivership certificate for the remaining amount of their uninsured funds” and will be entitled to future dividend payments once the FDIC sells all of Silicon Valley Bank’s assets.
Customers lining up outside of Silicon Valley Bank at its Menlo Park, CA branch. pic.twitter.com/SDNrSUC1C0
— Cointelegraph (@Cointelegraph) March 10, 2023
Customers queue in front of Silicon Valley Bank’s Menlo Park, California, branch.
Silicon Valley Bank, also known as SVB, operated 17 branches in California and Massachusetts. All branches and the main office will be open on March 13 to facilitate access for depositors.
SVB is one of the 20 largest banks in the United States by total assets. The bank provided financial services to several Crypto-focused venture capital firmsas Andreessen Horowitz and Redwood Capital.
The bank’s decline was swift, coming less than 48 hours after management revealed it needed to raise $2.25 billion in shares to prop up operations. The announcement was part of SVB’s mid-quarter financial update, which revealed the sale of $21 billion in securities at a loss of $1.8 billion.
The SVB (SIVB) share listing was halted on March 9 due to its extreme volatility. The 60% drop was the largest in history in a single day, according to The Wall Street Journal.
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