The crypto companies that are affected by the now shutdown of Silicon Valley Bank are; Circle, BlockFi, Yuga Labs, Avalanche, and Proof.
As the aftermath of the remarkable bankruptcy of the Silicon Valley Bank rages on, it is now evident that various cryptocurrency companies were affected.
SVB has always cultivated the reputation of an outstanding lender to tech startups all over the world.
But on Friday, the California Department of Financial Protection jumped in as the regulator for the SVB shutdown.
The Silicon Valley Bank’s misfortune makes it the second largest bank in American history to suffer such failure.
That is; after Washington Mutual succumbed to the 2008 financial crisis.
Mystery of the Crisis Revealed?
According to the Silicon Valley Bank reports, the bank has up to $212 billion worth of assets in the last quarter.
Then last Wednesday, the SIVB stock began to plummet due to the spreading rumors.
Rumors circulated that SVB is looking for an acquisition when they couldn’t raise adequate funds to cover their responsibilities.
As the days goes by, various venture capital funds encouraged their clients to pull out their funds. The result was that Silicon Valley Bank sustained a withdrawal worth $42 billion on Thursday.
Consequences:
Consequently, the backlash on the bank was huge. As a result, Nasdaq stopped the sale of SIVB shares on Friday.
Even though those majorly affected by the Silicon Valley Bank scare on Friday are tech startups and venture capital companies, many other crypto firms are also disclosing their exposure to the bank.
For instance; Proof, Yuga Labs, Avalanche, Circle, and BlockFi indicated that they also fell victim to the SVB collapse although some proclaimed publicly that they were able to avoid the damage.
However, on Sunday, March 12, Jerome Powell, U.S. Federal Reserve Chairman, Janet Yellen, Treasury Secretary, and Martin Gruenberg, FDIC (Federal Deposit Insurance Corporation) made a joint statement.
In their statement, they assured the SVB depositors that on Monday, March 13, they can access their funds. Meanwhile, the Federal Reserve is currently investigating the reason for the bank’s collapse.
Cryptocurrency Firms that Banked with SVB
Dapper Labs
Dapper Labs is a firm that backs NBA Top Shot NFTs. They announced that they had “minimal cash balances” at SVB.
As a result, they were not “materially impacted” by the SVB collapse. However, the minimal balances are still something.
Circle
Circle is the issuer of USDC, the world’s 2 largest stablecoins.
On Friday, Circle announced that SVB holds a certain portion of their undisclosed cash reserves which was used to support the USDC peg to the US dollar.
According to their statement on Friday, Silicon Valley Bank was among the 6 banks they trusted to oversee USDC’s cash reserves.
Even with what happened to SVB, Circle still claims that USDC can still carry out its operations normally.
Circle has also worked with Silvergate to store cash reserves. However, last week, they disassociated themselves from the crypto-friendly bank after the collapse.
Yuga Labs
Yuga Labs is a $4 billion firm that backs Bored Ape Yacht Club. The top NFT hub also got exposed to Silicon Valley Bank.
In his statement on Friday, Greg Solano, Yuga Labs co-founder said that the firm has “super limited exposure” to SVB although they haven’t yet confirmed the exact amount.
However, the amount “does not affect our plans or business at all” says Solano.
Nova Labs
Nova Labs is the startup behind Helium, a decentralized network as well as an internet provider. They also declared their exposure to the Silicon Valley Bank late last Friday.
According to the statement of Amir Haleem, Helium co-founder, and Nova Labs CEO, the company has a certain amount of $ remaining in SVB. However, the majority of their funds are in some other institutions.
BlockFi
BlockFi is a crypto lender that went bankrupt last November as a consequence of the FTX’s collapse. On Friday, the filed report on their bankruptcy proceedings shows they have $227 million in funds held in SVB.
Reportedly, the funds are not secured by the FDIC (Federal Deposit Insurance Commission
Proof
Proof is among the NFTs leaders and this SVB collapse may hit them harder.
According to the statement issued on Friday by Kevin Rose, Digg co-founder, and the backer of the top NFT collection Moonbirds, it is clear that Proof held cash at Silicon Valley Bank.
“Fortunately, Proof diversified their funds throughout ETH stablecoins and fiat”. So, even though SVB failure sucks, the expected loss will not affect Proof’s roadmap or the customer assets’ security.
Meanwhile, the company is yet to disclose the actual cash they have tied up at SVB.
Ripple
Brad Garlinghouse Ripple CEO tweeted Sunday night that the company “has slight exposure to Silicon Valley Bank since SVB is Ripple’s banking partner that is holding some of our funds”.
That notwithstanding, Garlinghouse maintains that Ripple is not expecting “any disturbance to our daily business” also, the company “retains its solid financial position.”
Pantera
Pantera is listed as one of the top cryptocurrency-focused VC companies. It even raised $1.3 billion worth of funds which solely targets blockchain-focused projects.
It is another cryptocurrency-based venture capital company exposed to the Silicon Valley Bank collapse. The amount of their exposure is yet to be determined.
Just this past month, on their SEC filing on February 3, Pantera counted SVB as 1 bank among the 3 custodians of their private funds.
Avalanche
On Friday evening, Avalanche Foundation, the backers of the Avalanche blockchain pronounced its exposure to the SVB.
Reportedly, the firm has more than $1.6 million in funds held by SVB.
At present, Avalanche’s major token AVAX has up to $5 billion in market capitalization. Moreover, they weren’t involved with the Silvergate collapse.
So it stands to chance that the slight exposure to SIVB wouldn’t disrupt their day-to-day business.
Meanwhile, they commiserate with SIVB and SI and are hoping that all depositors can recover their funds.
Cryptocurrency Firms that Claim Non-Exposure to SIVB
To prevent the possibility of more panic, many crypto firms stepped forward to declare that they are not involved with the Silicon Valley Bank.
They are as follows;
Paxos
Paxos is one of the cryptocurrency brokerage companies that announced “non-exposure” to SIVB.
A check on their stablecoins even supports the fact that Paxos has 0 exposures to SVB’s collapse.
From CoinGecko reports, the firm’s branded stablecoin BUSD’s worth is up to $8.4 billion while its Pax Dollar stablecoins are up to $840 million.
Gala Games
Gala, a Web3 gaming and entertainment startup announced that they are not exposed to SVB.
In his tweet reply to Kate Irwin, a Decrypt reporter, the company’s president Jason Brink confirmed the fact.
Crypto.com
The CEO of Crypto.com Kris Marszalek announced that the crypto exchange has zero exposure to Silvergate as well as Silicon Valley Bank.
Binance
The leading crypto service Binance CEO Changpeng Zhao declared their non-exposure to the Silicon Valley Bank collapse.
Other companies also announced their zero exposure to the Silicon Valley Bank collapse. They are;
- Immutable – the company behind Ethereum and Web3 game producer
- Polygon – the company that backs Ethereum scaling solutions
- Solana – A blockchain exchange
- Tether – The firm behind USDT, the global largest stablecoin
- Kraken – A crypto exchange
- Blur – the NFT marketplace emergent
- Ledn – A cryptocurrency lending platform
- Phantom – A crypto wallet
- DeLabs – The firm that backs the largest NFT collections
- DeGods and Yoots
