Silicon Valley Bank Collapse Leaves Blockchain VCs with $6 Billion in Assets
Silicon Valley Bank (SVB), a once-thriving financial entity, has reportedly collapsed, leaving prominent blockchain venture capitalists (VCs) holding over $6 billion worth of assets. A
ccording to a report released on March 11, the VCs with assets held by the now-defunct bank include Andreessen Horowitz (a16z), Paradigm, and Pantera Capital.
This news comes as a shock to many in the crypto space, as these VCs are significant investors in the industry. A16z, for instance, has active investments in popular blockchain projects such as Alchemy, Sky Mavis, and Yuga Labs. It was also an early investor in Coinbase, a leading cryptocurrency exchange. Paradigm, on the other hand, has invested in projects like Compound, Cosmos, and Uniswap, while Pantera Capital holds stakes in 1inch, Ankr, and Zcash.
The report was compiled by Castle Hall due diligence, using information extracted from filings with the United States Securities and Exchange Commission. It provides a snapshot of the VCs’ assets held in custody by SVB, as of the time of disclosure. However, it does not account for recent withdrawals, deposits, or transfers.
It is important to note that not all the assets held by SVB on behalf of these VCs are used in crypto investments. While the loss is relatively small, it has triggered a crisis of confidence, leading to tens of billions of dollars in redemption demands in just a few days. The bank reportedly still has $74 billion worth of longer-term U.S. Treasurys, which it has yet to liquidate to meet redemptions.
Circle, the issuer of the popular USD Coin (USDC) stablecoin, has also been affected by the collapse of SVB. The company currently has $3.3 billion worth of deposits stuck in the bank.
SVB’s collapse is a reminder of the risks associated with the crypto industry, which has largely operated outside the traditional financial system. While the industry has seen tremendous growth in recent years, it remains largely unregulated, and investors must exercise caution when entrusting their assets to third-party custodians.
In conclusion, the collapse of Silicon Valley Bank has sent shockwaves through the crypto industry, and its aftermath is likely to be felt for some time. Investors must remain vigilant and take steps to protect their assets, including diversifying their holdings and choosing reputable custodians.
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