Stablecoin issuer Circle and enterprise capital agency Sequoia Capital have been reportedly among the many high 10 depositors on the collapsed crypto-friendly Silicon Valley Financial institution (SVB) in March.
In response to a June 23 report from Bloomberg, the Federal Deposit Insurance coverage Company (FDIC) offered paperwork suggesting that Circle, Sequoia and others have been coated for deposits within the billions of {dollars}. The Federal Reserve introduced following the SVB collapse that it could work with the FDIC to make each insured and uninsured depositors entire — in most conditions, the FDIC solely insures as much as $250,000 per depositor.
Circle reportedly held roughly $3.3 billion in deposits, whereas Sequoia had roughly $1 billion. Different main depositors included Silicon Valley Financial institution itself, SVB Monetary Group, biotechnology analysis agency Altos Labs and Kanzhun Restricted, a China-based firm behind a significant on-line recruitment platform.
WHOA. The FDIC by chance posted an un-redacted doc displaying that the large VC agency Sequoia had $1 billion on deposit at SVB when it collapsed https://t.co/hCbcHZ0yev pic.twitter.com/Ys1qbHnvDr
— Joe Weisenthal (@TheStalwart) June 23, 2023
Associated: Circle CEO blames US crypto crackdown for declining USDC market cap
The failure of SVB and the next collapses of Signature Financial institution and First Republic Financial institution has put a highlight on how regulators in the USA deal with deposit insurance coverage. Although the Fed, FDIC and Treasury Division mentioned masking SVB and Signature deposits of greater than $250,000 was a part of a “systemic danger exception,” they’ve reportedly explored elevating the insurance coverage restrict.
Following the failure of SVB in March and Circle confirming it had roughly $3.3 billion in publicity to the financial institution, the agency’s USD Coin (USDC) briefly depegged from the U.S. greenback. In June, the stablecoin issuer introduced it deliberate to launch a local model of USDC on the Arbitrum community.
Journal: Unstablecoins: Depegging, financial institution runs and different dangers loom
