According to a Bloomberg report, the federal regulators’ decision to back the Silicon Valley bank saved Circle, US dollar coin issuer and Sequoia Capital, more than $4 billion.
According to a document released to the media house by Federal Deposit Insurance Corp (FDIC), more than $4 billion from the largest cryptocurrency industry that fell into crisis has been saved at the defunct Silicon Valley bank.
Circle and Sequoia are among the top 5 depositors of SVB
The document showed that stablecoin issuer Circle was the largest depositor in a Silicon Valley bank. The crypto company had a balance of $3.3 billion in the bank, which is about 8.2% of its USDC reserves.
On the other hand, Sequoia Capital, a prominent venture capital firm that has invested in several crypto companies, has $1 billion of its money in the bank trapped.
Other major depositors in the bank included Canzone with $902.9 million and Alto Labs with $680.3 million. Other companies such as Marqeta Inc. $634.5 million in the bank, Roku has $420 million, and Bill.com has $761.1 million. SVB-related entities have a combined deposit of $4.6 billion.
The subsidy decision cost the FDIC about $15.8 billion, with the 10 largest depositors accounting for $13.3 billion.
The impact of the banking crisis on crypto
The Bloomberg report highlights how the collapse of the Silicon Valley bank has affected many companies, particularly Circle, which has $3.3 billion in the bank.
The collapse of SVB has shaken crypto investors’ confidence in Circle’s USDC. Since the crash, the circulating supply of USDC has dropped to $28.18 billion from a peak of over $44 billion.
Prior to the banking crisis, several federal agencies warned banks of the liquidity risks that crypto posed to the banking industry. Fears were later exacerbated by the collapse of three crypto-friendly banks within a very short period.
Since then, many crypto companies have scrambled for new banking partners. For context, Binance.US struggled to find new banking partners prior to its confrontation with the US Securities and Exchange Commission. The current unfavorable regulatory environment has forced the company to move into a cryptocurrency exchange only.
Meanwhile, some crypto stakeholders have argued that the government used the banking crisis to restrict crypto access to banking infrastructure.
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