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Failed tech bank SVB held over $5B for prominent crypto VCs: Report

March 11, 2023
in Blockchain
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In keeping with a report that started circulating on March 11 within the aftermath of the collapse of Silicon Valley Financial institution (SVB), outstanding blockchain enterprise capitalists (VCs) have over $6 billion value of property held by the now-defunct monetary entity. These embody $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.

A16z at the moment holds energetic investments in tasks similar to Alchemy, Sky Mavis and Yuga Labs, and was beforehand an investor in cryptocurrency change Coinbase. Paradigm has invested in tasks similar to Compound, Cosmos and Uniswap. In the meantime, Pantera Capital holds stakes in tasks similar to 1inch, Ankr and Zcash.

The report, compiled by Fortress Corridor due diligence and extracted from United States Securities and Alternate Fee filings, is a point-time disclosure of the VCs’ property held in custody by SVB. It doesn’t embody updates similar to latest withdrawals, deposits or transfers after the time of disclosure. As well as, whereas the stated companies are outstanding traders within the crypto area, not all its property held by SVB are utilized in crypto investments.

SVB, a big monetary lender servicing enterprise capital companies and tech corporations, was shut down by California regulators on March 10. At the time, it was the 16th largest bank in the U.S., with over $212 billion in assets. The cause of the collapse was, apparently, a failed leveraged bet on U.S. treasury bonds that led to $1.8 billion in losses on its $21 billion portfolio after the U.S. Federal Reserve repeatedly raised interest rates this past year — sharply driving down the prices of bonds. 

Despite the relatively small loss, a crisis of confidence ensued, leading to tens of billions of dollars of redemption demands in a couple of days. The company reportedly has $74 billion left of longer-term U.S. Treasurys, which it has yet to liquidate to meet redemptions. Circle, the issuer of the popular USD Coin (USDC) stablecoin, currently has $3.3 billion worth of deposits stuck in SVB.