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

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

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

The report, compiled by Fortress Corridor due diligence and extracted from United States Securities and Change Fee filings, is a point-time disclosure of the VCs’ property held in custody by SVB. It doesn’t embrace updates reminiscent of latest withdrawals, deposits or transfers after the time of disclosure. As well as, whereas the mentioned corporations are distinguished traders within the crypto house, not all its property held by SVB are utilized in crypto investments.

SVB, a major monetary lender servicing enterprise capital corporations and tech corporations, was shut down by California regulators on March 10. On the time, it was the sixteenth largest financial institution within the U.S., with over $212 billion in property. The reason for the collapse was, apparently, a failed leveraged guess 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 rates of interest this previous yr — sharply driving down the costs of bonds. 

Regardless of the comparatively small loss, a disaster of confidence ensued, resulting in tens of billions of {dollars} of redemption calls for in a few days. The corporate reportedly has $74 billion left of longer-term U.S. Treasurys, which it has but to liquidate to satisfy redemptions. Circle, the issuer of the favored USD Coin (USDC) stablecoin, at the moment has $3.3 billion value of deposits caught in SVB.

SVB Crash Defined

Silicon Valley Financial institution—#16 largest US financial institution with $212B — simply crashed 60% in 1 day & fell 22% post-close. Inventory halted now.@BillAckman is looking a US gov bailout.@peterthiel is looking a financial institution run.
JPM, BAC, WFC all dropped 6%.
What’s subsequent?

Is that this… https://t.co/xT4t5hLiwI pic.twitter.com/GEbvAdT8SQ

— Ming Zhao (@FabiusMercurius) March 10, 2023