The US Federal Deposit Insurance Corporation (FIDC) began an auction process for Silicon Valley Bank on March 11 evening, Bloomberg reported, citing anonymous sources. Apparently, the offers will remain open for only a few hours, before the process closes this Sunday.
According to Bloomberg sources, the FDIC is looking for a buyer for the Californian bank over the weekend, before the markets open on March 13. However, a final decision has not yet been made and an agreement may not be reached.
Just today, the US Secretary of the Treasury, Janet Yellen, stated during an interview that she is working with regulators to address the collapse of Silicon Valley Bank and protect investors, but is not considering a major bailout. He noted that regulators “want to make sure that problems that exist at one bank don’t create contagion to others that are strong.”
According to Yellen, the FDIC is considering “a wide range of available options,” including acquisitions of foreign banks. “We are certainly working to address the situation in a timely manner,” she noted.
Bankruptcy trading platform Cherokee Acquisition told the Financial Times that some clients are offered between 55 and 65 cents on the dollar for their unsecured deposits. A second source said other clients received offers of between 70 and 75 cents on the dollar for the deposits they had at the bank.
“I’ve had a few companies selling for 90 cents to secure payroll. All of these companies have the SVB effect,” a venture capitalist told the Financial Times.
The founder and managing partner of Ripple Ventures, Matt Cohen, claimed on Twitter that financial institutions are offering affected companies “aggressive loan conditions” with certificates of suspension of payments as collateral:
Getting bought some pretty aggressive lending terms from people spinning up lending facilities to affected companies, with receivership certificates as collateral (0.30 / dollar range, 18m, 12%+ equity)
As you know else seeing these offers???
—Matt Cohen (@mattybcohen) March 11, 2023
It is not clear if Ripple has exposure to the collapse of SVB. Ripple CTO David Schwartz said on Twitter that an official statement regarding Ripple’s potential exposure to Silicon Valley Bank would be released soon. Cointelegraph reached out to Ripple but did not receive an immediate response.
A Castle Hill audit report listing depositors was removed on March 12. Cointelegraph previously reported that Web3 venture capitalists’ assets exceed $6 billion in the bank, including $2.85 billion from Andreessen Horowitz, $1.72 billion from Paradigm, and $560 million from Pantera Capital.
Silicon Valley Bank was shut down by California’s financial watchdog on March 10, after announcing a major asset and stock sale aimed at raising $2.25 billion of capital to shore up its operations.
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