Benzinga - Crypto companies and investors are among those impacted by the latest collapse of Silicon Valley Bank (NASDAQ: SIVB), which has sent tech start-ups that once relied on the bank into turmoil.
Following news of the bank's demise on Friday, Crypto firm Circle, which has $3.3 billion of its $40 billion of USD Coin reserves at SVB, said in a Twitter post that it and USDC will continue to operate normally while the firm waits to see how SVB's receivership will affect its depositors.
1/ Following the confirmation at the end of today that the wires initiated on Thursday to remove balances were not yet processed, $3.3 billion of the ~$40 billion of USDC reserves remain at SVB.
— Circle (@circle) March 11, 2023
Last week, the Boston-based firm said it had moved a "small percentage" of USDC reserve deposits held at Silvergate (NYSE: SI) — which announced plans on Wednesday to wind down its operations and liquidate its bank — to other banking partners, according to Reuters.
In response to the latest events, cryptocurrency investors have redeemed more than $2 billion in Circle's Stablecoin in the past 24 hours, blockchain data provider Nansen notes.
Read also: EXCLUSIVE: No, Silicon Valley Bank Collapsing Doesn't Mean The Sky Is Falling: Here's Why
SVB's downfall has affected other firms as well. A bankruptcy document revealed that cryptocurrency lending firm BlockFi, for instance, has $227 million worth of uninsured funds allocated to a money market mutual fund offered by SVB. The disclosure comes just months after BlockFi halted withdrawals in the wake of crypto exchange FTX's implosion.
Per new bankruptcy filing, BlockFi has $227m in Silicon Valley Bank. The bankruptcy trustee warned them on Mon that bc those funds are in a money market mutual fund, they’re not FDIC secured — which could be a prblm w/ keeping in compliance of bankruptcy law pic.twitter.com/hnpo8anrrS
— Lauren Hirsch (@LaurenSHirsch) March 10, 2023Venture capital firm Pantera may similarly have an unknown amount of exposure to SVB's collapse, per an SEC filing. One of the largest crypto-focused VC firms in the world, Pantera raised $1.3 billion for a fund focused on blockchain-based projects.
Blockchain Avalanche, whose native token currently boasts a market capitalization of $4.84 billion, also announced on Friday that it has over $1.6 million in exposure to SVB.
In light of recent news, we would like to confirm that the Avalanche Foundation has no exposure to Silvergate and a little over $1.6mm of exposure to Silicon Valley Bank. Avalanche Foundation is saddened by the news about SI and SIVB, and hope that all depositors are made whole.— Avalanche