The tech bank collapse of 2023
source link: https://www.theverge.com/23638474/svb-collapse-silvergate-silicon-valley-bank-tech-crypto
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The tech bank collapse of 2023
March began in an inauspicious way: with the collapse of Silvergate Bank, an institution closely associated with crypto. Then just a few days later, the FDIC stepped in to close Silicon Valley Bank, a three-decade-old firm that held deposits from many startups and tech companies. Days later, the failure of Signature Bank marked the third in a week.
What does this mean for startups or the industry at large? What could this mean for the American banking system? It’s too early to say (though we have some hunches). The Verge will stay up to the minute with news, analysis, and explainers on the effects of these bank collapses and what happens next.
- External LinkThe FDIC is going to try and auction off Silicon Valley Bank again.
That didn’t quite work out on Sunday, but the Wall Street Journal reports officials told senators they have “additional flexibility” to make a deal now that the bank’s collapse has been deemed a threat to the financial system.
The move also gives regulators the ability to offer would-be buyers deal sweeteners such as loss-sharing agreements, according to former regulators.
While none of the largest U.S. banks bid on SVB during a failed auction on Sunday, at least one offer was made by another institution, but it was declined by the FDIC, officials told lawmakers on Monday.
- YoutubePresident Joe Biden says Silicon Valley Bank deposits will “be there when you need them.”
It’s the promise the president made to depositors in a speech at the White House on Monday. Throughout his brief remarks, Biden also reassured viewers that no taxpayer money would be used to bail out the bank.
The speech followed a Sunday announcement from the government’s top banking regulators that they were setting up an emergency lending program to ensure all SVB depositors are made whole.
Mar 12, 2023, 10:58 PM UTCElizabeth Lopatto
Signature Bank is closed by regulators, the third US bank failure in a week
Another big crypto bank has vanished, with the Treasury, FDIC, and Federal Reserve citing “systemic risk” at Signature, while promising Silicon Valley Bank depositors will have access to all of their funds on Monday.
Mar 12, 2023, 7:55 PM UTCEmma Roth
Etsy is delaying seller payouts following Silicon Valley Bank’s collapse
The DIY marketplace is pressing pause on payouts until it can route deposits through one of its other payment partners. But some sellers feel as if they’ve been left in the dark.
- YoutubeA federal bailout isn’t in the cards for Silicon Valley Bank, but deposits are safe.
Depositors will be paid back in full and can access their money starting Monday morning, officials said. In an interview on Face the Nation, US Treasury Secretary Janet Yellen ruled out a government-backed bailout:
During the financial crisis, there were investors and owners of systemic large banks that were bailed out. And the reforms that have been put in place means that we’re not going to do that again. But we are concerned about depositors and are focused on trying to meet their needs.
- External LinkRoku signals Silicon Valley Bank distress.
The company told the SEC that it had $487 million, around 26 percent of its cash, held with Silicon Valley Bank, which folded today. It also said it’s unsure about how much of that it’ll get back — a common concern among firms that banked there, especially with payday looming.
Roku’s 8-K SEC filing[www.sec.gov]
- The VergePanic! At the bank.
Silvergate is gone. The FDIC took over Silicon Valley Bank. Several other banks have lost billions in value, and it’s unclear whether a number of tech companies will be able to keep operating while all of this gets figured out.
If you’re unclear why our situation is the way it is, go back and take a look at Liz Lopatto’s article from a few weeks ago about interest rates and what they mean for tech companies right now.
Mar 10, 2023, 5:44 PM UTCRichard Lawler
Silicon Valley Bank has failed
The FDIC and California regulators shut down the bank, which is known for serving startups and venture capital firms.
Mar 10, 2023, 4:04 PM UTCRichard Lawler
Another tech bank is in deep trouble — but not because of crypto
A cash crunch for venture capitalist-backed startups has squeezed Silicon Valley Bank and spooked customers into moving their money elsewhere instead of waiting to see what happens.
- External LinkSilvergate Capital survived a post-FTX run on deposits, but now the crypto-focused bank’s stock is tanking.
Exactly one month ago, Silvergate’s CEO insisted things were ok, despite the problems with FTX, a major customer.
Today its Q4 filing reveals deposits from crypto customers shrank from $11.9 billion to $3.9 billion in three months, $150 million of the bank's deposits are held by customers who’ve filed bankruptcy, and it’s laying off 200 employees.
The company’s stock price is down 46 percent.
- External LinkSilvergate: “We’re fine!”
Silvergate Capital, a famous crypto bank, has filed a letter with the SEC from its CEO, Alan Lane. Apparently, he is using it to correct what he terms “speculation — and misinformation — being spread by short sellers and other opportunists.”
Okay! Unfortunately for Lane, this question raises more questions than it answers, such as what his “extensive due diligence” on FTX and Alameda consisted of!
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