Last Updated on March 12, 2023 by Bitfinsider
A story that surfaced on March 11 following the failure of Silicon Valley Bank (SVB) claims that well-known blockchain Venture Capitalists (VCs) have more than $6 billion in assets held by the now-defunct financial organization. These include $560 million from Pantera Capital, $1.72 billion from Paradigm, and $2.85 billion from Andreessen Horowitz (a16z).
A16z previously invested in cryptocurrency exchange Coinbase and presently holds investments in projects like Alchemy, Sky Mavis, and Yuga Labs. Projects like Compound, Cosmos, and Uniswap have received funding from Paradigm. In the meantime, Pantera Capital has investments in initiatives like 1inch, Ankr, and Zcash.
The report, which was put together by Castle Hall due diligence and drawn from reports with the Securities and Exchange Commission of the United States, is a point-in-time disclosure of the assets that SVB is holding on behalf of the VCs. Updates like recent withdrawals, deposits, or transfers that have occurred after the publication date are excluded. While the aforementioned companies are well-known investors in the cryptocurrency market, not all of their assets owned by SVB are invested in cryptocurrencies.
California regulators shut down SVB, a sizable financial lender that provided services to tech businesses and venture capital firms, on March 10. With over $212 billion in assets at the time, it was the 16th biggest bank in the United States. The U.S. Federal Reserve repeatedly increased interest rates over the course of the past year, sharply depressing bond prices, and this appears to be what caused the collapse. This leveraged bet on U.S. treasury bonds failed, resulting in $1.8 billion in losses on its $21 billion portfolio.
Despite the comparatively minor loss, a confidence crisis developed, which in a matter of days resulted in redemption requests totaling tens of billions of dollars. According to reports, the firm still has $74 billion in longer-term US Treasury securities that it has not yet sold to pay redemptions. The popular USD Coin stablecoin’s creator, Circle, is presently holding deposits in SVB totaling $3.3 billion.
Hardware wallets are safe and secure devices that can be used offline. They keep your cryptocurrency offline, making it impossible for you to be hacked. To find out more on the leading hardware wallets, you may view our reviews here: Ledger & Trezor
Disclaimer: The views and opinions expressed by the author, or any people mentioned in this article, are for informational purposes only, and they do not constitute financial, investment, legal, tax or other advice. Investing in or trading cryptocurrency or stocks comes with a risk of financial loss.