The U.K. operations of Silicon Valley Bank have been suspended by the Bank of England (BoE). branch (SVB UK), claiming that it has a "limited presence" and no "critical functions" supporting the financial system in the United Kingdom (UK).
SVB UK will "cease making payments or receiving deposits," according to a statement from BoE on March 10; BoE plans to ask the court to put SVB UK into a "Bank Insolvency Process."
This comes after reports that Silicon Valley Bank (SVB) in the United States had been forced to close by the California Department of Financial Protection and Innovation.
The Financial Services Compensation Scheme (FSCS) would pay out "qualifying depositors" up to the "protected limit" of £85,000 (about $102,288 USD) or up to £170,000 (roughly $204,577 USD) for joint accounts, as "soon" as feasible, according to the BoE.
It further stated that throughout the insolvency proceedings, the bank liquidators will be in charge of managing the remaining SVB UK assets and liabilities, with any recovery "distributed" to its creditors.
Many U.K. On March 12, venture capitalists (VCs), including Index Ventures and Atomico, released a joint statement endorsing SVB UK, describing it as a "trusted" and "valued partner" who supports startups in the U.K. in a "pivotal" way.
The Coalition for a Digital Economy is a U.K. According to a non-profit organization that advocates for regulations to help digital entrepreneurs, "a considerable number" of companies and investors in the ecosystem have "major exposure" to SVB UK, and they will be "extremely concerned," the organization said on March 11.
A Castle Hill report from March 11 stated that the now-defunct financial institution had assets valued at over $6 billion that were held by well-known blockchain VCs.
Included in these are $560 million from Pantera Capital, $2.85 billion from Andreessen Horowitz (a16z), and $1.72 billion from Paradigm.