In the wake of the Silicon Valley Bank (SVB) affair, many players in the cryptocurrency ecosystem have clarified their possible relationships with the bank. In addition to Circle, who is or isn’t exposed to SVB?
Who in the crypto ecosystem is exposed to Silicon Valley Bank?
In light of the panic generated by the collapse of Silicon Valley Bank (SVB), it is interesting to consider which players might be affected, in order to estimate the risk of contagion to the cryptocurrency ecosystem. Obviously, the centre of this news remains Circle’s USDC, with 3.3 billion in cash blocked at this trusted third party, which led to the depeg of stablecoin.
Of course, it is not the only player impacted. According to journalist Lauren Hirsch, there is the bankrupt platform BlockFi, which reportedly holds $227 million at SVB. These liquidities are held in a mutual fund and are therefore not insured. Furthermore, this could conflict with the obligations of Chapter 11 of the US bankruptcy law:
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, 2023
For their part, our colleagues at Decrypt have alerted us to the Pantera Capital investment fund, indicating that according to a file filed with the Securities and Exchange Commission (SEC) last month, the company has only three custodians for its assets, including Silicon Valley Bank. Without more information on the subject, it would be advisable to insist on the conditional and to follow any announcements on this subject, as the fund has invested in a number of projects in the ecosystem.
As for the Avalanche Foundation, the entity behind the development of the Avalanche ecosystem (AVAX) has not claimed any exposure to Silvergate Bank, but confirms that it has $1.6 million locked up at 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 (@avalancheavax) March 10, 2023
Also according to Decrypt, the famous non-fungible token (NFT) studio Yuga Labs would also have “super limited financial exposure” to SVB.
Players confirmed to have no exposure
While some companies and projects have revealed that they have exposure to Silicon Valley Bank, others have reassured the community. On the French side, this is the case of Coinhouse, as reported by its CEO Nicolas Louvet, who said it was also the case for other banking institutions in difficulty:
US tech bank crisis:
The partner banks of @CoinhouseHQ are Société Générale, Crédit Agricole, Fidor (BPCE group).
We have no commercial, financial or other relationship with Silicon Valley Bank, Silvergate or Signature Bank– Nicolas Louvet (@LouvetNicolas) March 10, 2023
RealT, which enables real estate tokenisation, also confirmed it was not exposed, in an email sent this afternoon to its users:
“RealT’s primary banking partner is based in Florida and has nothing to do with Silicon Valley Bank in California. “
Nevertheless, payment for RealT tokens with USDC or xDAI will have to be made at the current exchange rate of said stablecoins, not at the value of a dollar they are supposed to represent.
Amongst other players who do not have a relationship with Silicon Valley Bank, announcements have been made by various officials from KuCoin, Solana Labs and Solana Foundation, and Polygon.
For those who are impacted, or those who are not, this list is by no means exhaustive. Further announcements will come from the various projects in the ecosystem, and as we have seen time and time again, the contagion effect can spread quickly from one company to another.
