Many U.K. venture capital companies have backed SVB UK, noting that it is a “trusted” partner and performs a “crucial” role in assisting entrepreneurs.
The Bank of England (BoE) has ceased operations of Silicon Valley Bank’s United Kingdom branch (SVB U.K.), citing its “limited presence” and lack of “critical services” sustaining the financial system in the country.
BoE said on March 10 that SVB U.K. would “cease paying payments and receiving deposits” because BoE plans to petition the court to put SVB U.K. into a “Bank Insolvency Process.”
This is a result of the California Department of Financial Protection and Innovation’s shutdown of SVB.
The Bank of England explained that a bank insolvency procedure would result in the Financial Services Compensation Scheme paying “eligible depositors” up to the “protected limit” of £85,000 (approximately $102,288) or up to £170,000 (roughly $204,577) for joint accounts as “quickly” as possible.
The bank liquidators will oversee the remaining assets and obligations of SVB U.K. throughout its bankruptcy procedures, and any recovery will be “distributed” to its creditors.
Numerous U.K. venture capitalists (VCs), notably Index Ventures and Atomico, endorsed SVB U.K. in a statement made on March 12. The report voiced support for SVB U.K., describing it as a “trusted” and “valued” partner that plays a “crucial” role in assisting U.K. entrepreneurs.
The Coalition for a Digital Economy, a U.K.-based group that advocates for legislation that assists digital entrepreneurs, claimed on March 11 that a “substantial number” of companies and investors in the ecosystem had “major exposure” to SVB U.K., adding that they are “extremely worried.”
Meanwhile, research published by Castle Hill on March 11 indicated that notable blockchain VCs have more than $6 billion in assets at the bankrupt bank.
Andreessen Horowitz contributed $2.85 billion, Paradigm contributed $1.72 billion, and Pantera Capital contributed $560 million.
Also Read: Before the bank run, Ripple’s CTO claimed that Silicon Valley Bank was already “insolvent”
