The closure of Silicon Valley Bank (SVB) has created a sense of panic in the tech industry, as the Federal Deposit Insurance Corporation (FDIC) steps in as the bank’s receiver.
According to a Bloomberg report, regulators are now working around the clock to sell assets of the failed bank this weekend, with the hope of making between 30% to 50% of uninsured deposits available for withdrawal on Monday.
The bank, which has long been popular among tech companies and start-ups, had approximately $209 billion in total assets and $175.4 billion in total deposits as of December 31, 2022.
The FDIC insures deposits up to $250,000, meaning many depositors should be protected. However, the bank run has left many uninsured deposits at risk.
The FDIC is now seeking to sell SVB assets as quickly as possible, with more cash becoming available if the sale is successful by Sunday night. It’s hoped that this will help mitigate the fallout of the bank’s collapse, which has sent shockwaves through the tech industry.
USDC issuer Circle is among the tech companies affected, with $3.3 billion of its cash reserves for the stablecoin stuck at Silicon Valley Bank. While the FDIC works to resolve this, there are concerns that the bank’s failure could have far-reaching consequences for the broader tech industry.
With Silicon Valley Bank being the largest U.S. bank to fail in over a decade, its collapse is a stark reminder of the importance of banking regulations and the need for vigilance in the financial sector.
As regulators work to minimize the damage, many in the tech industry are anxiously awaiting news of the bank’s asset sale and hoping for a positive outcome on Monday.
