Silicon Valley Bank (SVB) was shuttered by the California Department of Financial Protection and Innovation on Friday, marking the second bank to shut down within days.
The DFPI said in a statement that it had taken possession of the bank, “citing inadequate liquidity and insolvency.” The Federal Deposit Insurance Corporation has taken receivership of the bank, DFPI said, which the FDIC confirmed.
“Silicon Valley Bank is a state-chartered commercial bank and member of the Federal Reserve System based in Santa Clara, with total assets of approximately $209 billion and total deposits of approximately $175.4 billion as of Dec. 31, 2022. Its deposits are federally insured by the FDIC subject to applicable limits,” DFPI said in its statement.
The bank’s closure follows fast on the heels of competitor Silvergate’s (SI) voluntary liquidation earlier this week. Silvergate said in its announcement earlier this week that all deposits would be repaid.
While not perceived as “crypto-friendly” as Silvergate, the tech-forward Silicon Valley Bank did count a number of crypto entities as clients – especially hedge funds and VC firms. According to CoinDesk research, Blockchain Capital, Castle Island Ventures, Dragonfly and Pantera all had relationships with the bank.
Among the banks moving lower on the news are fellow west coast lenders First Republic Bank (FRC), now off 15%, and Western Alliance Bancorp (WAL), now down 25%. Crypto-friendly Signature Bank (SBNY) has also added to losses, now off 13%.
The broader stock market has turned from modest gains to modest losses, the S&P 500 now lower by 0.3%. Bitcoin is little-changed at just above $20,000.
According to Reuters, a SVB client in the U.K. told the newswire that their dashboard which should show "account balances and money transfers" was down.
UPDATE (March 10, 2023, 18:00 UTC): Adds additional detail.