Silicon Valley Bank’s recent closure has sent shockwaves throughout the tech industry as regulators work to sell its assets over the weekend.
The Federal Deposit Insurance Corporation (FDIC) stepped in as the bank’s receiver after it failed to keep up with its depositors’ demands. SVB is a popular bank among tech companies and start-ups, and the failure has left many investors and customers anxious about their finances.
Bloomberg reported that regulators are hoping to make between 30% to 50% of uninsured deposits available for withdrawal on Monday.
The FDIC has insured deposits of up to $250,000, but it remains unclear how much of the uninsured deposits will be recovered. More cash may become available if the FDIC is successful in selling the bank’s assets by Sunday night.
SVB’s total assets amounted to approximately $209 billion, and total deposits were $175.4 billion as of Dec. 31, 2022. The bank’s failure marks the largest U.S. bank collapse in over a decade, with Circle, a USDC issuer, having $3.3 billion of its cash reserves for the stablecoin stuck at Silicon Valley Bank.
As regulators work to sell SVB’s assets, many tech companies and start-ups are anxiously waiting to see what their financial future holds.
The situation highlights the importance of choosing a reliable bank with the strong financial backing and the importance of maintaining a diversified portfolio to mitigate risks.
