SVB UK Shut Down by the Bank of England

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The Bank of England (BoE) has terminated operations at Silicon Valley Bank’s United Kingdom branch (SVB U.K.), citing a “limited presence” in the country and no “critical functions” supporting the financial system.

SVB U.K. will “stop making payments or accepting deposits,” according to a statement made by BoE on March 10; BoE plans to ask the court to put SVB U.K. into a “Bank Insolvency Procedure.”

According to the BoE, in the event of a bank insolvency, “eligible depositors” would be compensated by the Financial Services Compensation Scheme up to the “protected limit” of £85,000 ($102,288) or up to £170,000 ($204,577) for joint accounts as soon as possible.

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It further stated that throughout its insolvency proceedings, the bank liquidators would oversee the existing SVB U.K. assets and liabilities, with any recovery “distributed” to its creditors.

On March 12, a number of venture capitalists (VCs) in the UK, including Index Ventures and Atomico, released a statement supporting SVB U.K. SVB U.K. was praised in the statement, which claimed that it is a “trusted” and “valued partner” who supports startups in the U.K. in a “pivotal” way.

SVB in Trouble

This comes after the California Department of Financial Protection and Innovation shut down SVB. A U.K. non profit organization called the Coalition for a Digital Economy claimed on March 11 that a “large number” of entrepreneurs and investors in the ecosystem have “significant exposure” to SVB U.K. and that this will cause them to be “very concerned.”

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Recently, Circle, the company that created the USDC stablecoin, has stated that the Silicon Valley Bank, which is one of its banking partners, has $3.3 billion of its reserve in cash deposits (SVB). In addition, a March 11 Castle Hill study found that well-known blockchain venture capitalists hold assets worth over $6 billion at the long-gone bank.

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