The Bank of England Closed Down the UK Office of Silicon Valley Bank
The Bank of England (BoE) has suspended the activities of Silicon Valley Bank’s branch in the United Kingdom (SVB UK), noting that it has a “restricted presence” in the UK and no “vital functions” aiding the financial system.
On Mar. 10, BoE announced that they were seeking to put SVB UK into a “Bank Insolvency Procedure” and that it would cease taking deposits and making payments as a result.
The California Department of Financial Protection and Innovation issued a directive the same day to shut down Silicon Valley Bank (SVB) in America.
The BoE noted that, in the event of a bank insolvency, “eligible depositors” are eligible to receive a payout from the Financial Services Compensation Scheme (FSCS) up to the maximum amount of £85,000 (roughly $102,288 USD) for individual accounts and £170,000 (roughly $204,577 USD) for joint accounts; with payments being made as expeditiously as possible.
The statement also stated that the liquidators of the bank would take charge of dealing with the remaining possessions and obligations of SVB UK during its insolvency proceedings, with any recoveries to be shared among its creditors.
On March 12th, a number of British venture capitalists such as Index Ventures and Atomico released a collective statement supporting SVB UK. The declaration showed their admiration for the company, calling it an “esteemed” and “valued partner” that is essential to aiding startups in the U.K.
The Coalition for a Digital Economy, a non-profit organization in the United Kingdom which promotes regulations that assist digital startups, announced on March 11th that many startups and investors in the industry are heavily reliant on SVB UK, and will undoubtedly be worried.
A report released on March 11 showed that prominent venture capitalists in the blockchain industry have assets valued at over $6 billion held by the defunct financial institution.
Andreessen Horowitz (a16z) has invested $2.85 billion, Paradigm has put in $1.72 billion, and Pantera Capital has contributed $560 million.