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- Silicon Valley Bank has been shut down by the California Department of Financial Protection and Innovation.
- An FDIC-insured crypto-friendly bank has been shut down by banking regulators due to illiquidity and insolvency.
- Trading in the bank’s shares was suspended earlier today after plunging 66% in pre-market trading.
- Crypto companies including Binance and Immutable have confirmed that they have no exposure to SVB.
Silicon Valley Bank has been shut down by California’s banking regulator. SVB Financial Group was shut down by the California Department of Financial Protection and Innovation (DFPI) in what is being called the largest bank failure since the financial crisis.The banking regulator took over the bank earlier today, making it the second crypto-friendly lender to close shop this week, followed by Silvergate Bank
voluntary liquidation.
DFPI: Silicon Valley banks illiquid
according to a Press release Silicon Valley Bank is illiquid according to the DFPI. Under Section 592 of the California Banking Code, California banking regulators list bankruptcy as an additional factor for receivership of FDIC-insured banks. The U.S. Federal Deposit Insurance Corporation has been named receiver for the cryptocurrency-friendly bank.
The FDIC creates the Santa Clara Deposit Insurance National Bank (DINB). Upon closure of SVB, all insured deposits at the bank are immediately transferred to DINB.according to a statement FDIC
, Silicon Valley Bank depositors will have until March 13, 2023 to fully utilize their insured deposits. The FDIC will be responsible for selling the bank’s assets and distributing the money to uninsured depositors.
The FDIC will pay prepaid dividends to uninsured savers within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds. “
FDIC
Shares of Silicon Valley Bank on Nasdaq were suspended earlier today after falling 66% in premarket trading. The previous close was $106.04. As of December 31, 2022, the bank’s total deposits were approximately US$209 billion, and total deposits were approximately US$175.4 billion.
Binance CEO Changpeng Zhao confirmed on Twitter that his company had no exposure to SVB. Leading web3 company Immutable also confirmed that it had no contact with the failed bank. However, USD coin issuer Circle does have an undisclosed amount deposited with Silicon Valley Bank.
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