The Bank of England (BoE) has stopped the operations of Silicon Valley Bank’s U.K. branch (SVB UK), stating that it has a limited presence in the UK and no critical functions supporting the financial system.
The bank regulator issued a statement on March 10, announcing that SVB UK will stop making payments or accepting deposits as it seeks to place the bank into a Bank Insolvency Procedure.
The move comes on the same day that the California Department of Financial Protection and Innovation ordered the closure of Silicon Valley Bank (SVB) in the United States.
BoE explained that a bank insolvency procedure would mean that eligible depositors are paid out by the Financial Services Compensation Scheme (FSCS) up to the protected limit of £85,000 (approximately $102,288 USD) or up to £170,000 (approximately $204,577 USD) for joint accounts as quickly as possible.
The bank liquidators will be responsible for managing the remaining SVB UK assets and liabilities during its insolvency proceedings, with any recoveries distributed to its creditors.
Several UK venture capitalists (VCs) have expressed support for SVB UK. Index Ventures and Atomico issued a joint statement on Mar. 12 endorsing SVB UK, stating that it is a trusted and valued partner that plays a pivotal role in supporting startups in the UK.
However, the Coalition for a Digital Economy, a UK non-profit that campaigns for policies to support digital startups, stated on Mar. 11 that there are a large number of startups and investors in the ecosystem who have significant exposure to SVB UK, adding that they will be very concerned.
Meanwhile, a March 11 Castle Hill report revealed that prominent blockchain VCs have over $6 billion worth of assets held by the now-defunct financial entity.
