FDIC Forms Deposit Insurance for Troubled Crypto Start-up Lender SVB
- The FDIC said depositors would have access to their insured deposits.
- Silicon Valley Bank has over $209 billion in assets and $175.4 billion in total deposits.
- Binance CEO mocked US critics as two banks became insolvent.
On Friday, Silicon Valley start-ups lender, SVB Financial Group, was closed by the California Department of Financial Protection and Innovation and transferred to the Federal Deposit Insurance Corporation (FDIC).
According to an official statement, the FDIC told insured depositors they would have full access to their insured deposits, but it is still unclear how many of the bank’s deposits were not insured. The report noted that uninsured depositors would get a receivership certificate for the remaining uninsured funds, but there is no guarantee that these funds will be paid out in full.
Notably, Silicon Valley Bank was one of the largest banks in the United States, with over $209 billion in total assets and $175.4 billion in total deposits. The crypto sector could suffer significant drawbacks from the ensuing bankruptcy trend among US banks.
Silicon Valley Bank has a history of collaborating with many crypto businesses and trading platforms. According to reports, Silicon Valley Bank ranked as the second largest lender to crypto startups in 2019, behind only Silvergate Bank, which now battles a liquidity crunch.
Early today, Changpeng Zhao, the CEO of Binance, took to Twitter to mock US detractors as the two significant banks in the United States became insolvent and unable to process customer withdrawals.
I just tweeted a few minutes ago how these anti-crypto incumbent protecting regulatory thugs were never going to let the truth get in the way of the BS narrative they intend to promote. All we can do is keep hitting them with facts and the truth as Caitlin does here. https://t.co/dau1jR3yEq
— John E Deaton (@JohnEDeaton1) March 9, 2023
Previously, US Senator Sherrod Brown blamed Silvergate Bank’s insolvency on crypto’s volatility. Crypto lawyer John Deaton argued that the US regulatory authorities are not interested in the truth but in promoting a false narrative that suits their agenda of obstructing crypto adoption.
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