The Bank of England (BoE) has halted operations of Silicon Valley Bank UK, the UK branch of SVB, stating that it has a “limited presence” in the UK and no “critical role” in supporting the financial system.
The BoE issued a communicate on March 10, stating that SVB UK will “stop making payments or accepting deposits” as the central bank intends to ask the court to place SVB UK in “Bank Insolvency Proceedings”.
This follows news on the same day that the California Department of Financial Protection and Innovation ordered the closure of Silicon Valley Bank (SVB) in the United States.
The BoE explained that a bank insolvency proceeding would mean that “eligible depositors” would receive payment from the Financial Services Compensation Scheme (FSCS) up to the “protected limit” of £85,000 (approximately $102,288) or up to £170,000 ( approximately $204,577) for joint accounts, as “quickly” as possible.
He added that the liquidators of the bank would be responsible for managing SVB UK’s remaining assets and liabilities during its insolvency proceedings, and that any recovery would be “distributed” among its creditors.
Several UK venture capital firms, including Index Ventures and Atomico, issued a joint statement on March 12 backing SVB UK. The statement expressed support for SVB UK, saying it is a “trusted” and “valued partner” that plays a “critical” role in supporting startups in the UK.
A joint statement for @Jeremy_Hunt & @hmtreasuryfrom a number of leading UK venture capital funds, in support of @SVB_UK pic.twitter.com/7dGHh3WHnr
— Atomic (@atomic) March 11, 2023
The Coalition for a Digital Economy, a British non-profit organization that advocates for policies to support digital startups, stated on March 11 that there are a “large number” of startups and investors in the ecosystem that have “significant exposure” to SVB UK, adding that they will be “very concerned.”
Meanwhile, a note from Castle Hill dated March 11 revealed that well-known crypto venture capital companies have assets valued at more than USD 6,000 million withheld from the defunct financial institution.
These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.
