- Bloomberg report reveals companies with the most funds in the failed Silicon Valley Bank (SVB).
- Circle and Sequoia Capital are among the firms with billions of dollars in deposits covered by the FDIC.
- SVB’s collapse sheds light on how US regulators handle deposit insurance and sparks discussions on increasing insurance limits.
A recent Bloomberg report has identified the companies with the most funds in the now-defunct Silicon Valley Bank (SVB), including Circle and Sequoia Capital. The report, based on documents from the bank’s collapse in March, reveals that these firms had billions of dollars in deposits insured by the Federal Deposit Insurance Corporation (FDIC).
Companies with the Most Funds in SVB Identified
According to the Bloomberg report, companies such as Circle and Sequoia Capital were among the top depositors in SVB. Following the bank’s collapse, the Federal Reserve announced that it would work with the FDIC to protect both insured and uninsured depositors. Circle reportedly had approximately $3.3 billion in deposits, while Sequoia had around $1 billion.
WHOA. The FDIC accidentally posted an un-redacted document showing that the big VC firm Sequoia had $1 billion on deposit at SVB when it collapsed pic.twitter.com/Ys1qbHnvDr
— Joe Weisenthal (@TheStalwart) June 23, 2023
The collapse of SVB and the subsequent bankruptcy of Signature Bank have brought attention to how US regulators handle deposit insurance. The Federal Reserve, FDIC, and Treasury Department have stated that they are evaluating SVB and Signature deposits under the systemic risk exception, and are reportedly considering increasing the insurance limit.
Circle’s Exposure to SVB’s Collapse
In the wake of SVB’s collapse, Circle confirmed that it carried a risk of approximately $3.3 billion with the bank and temporarily stopped pegging its USD Coin to the US dollar. However, in June, the stablecoin issuer announced plans to launch a local version of USDC on the Arbitrum network.
Regulatory Implications and Future Developments
The fallout from SVB’s collapse and the subsequent focus on deposit insurance in the US may lead to changes in how regulators approach deposit protection. As discussions around increasing insurance limits continue, it remains to be seen how these developments will impact the broader financial landscape and the cryptocurrency industry.
