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The Bank of England (BoE) has halted the operations of Silicon Valley Bank’s U.K. branch (SVB UK), stating that it has a “limited presence” within the United Kingdom (UK) and no “critical functions” supporting the monetary system.
BoE issued an announcement on Mar. 10, declaring that SVB UK will “stop making payments or accepting deposits,” as BoE intends to use to the court docket to put SVB UK right into a “Bank Insolvency Procedure.”
This follows information on the identical day that the California Department of Financial Protection and Innovation ordered the closure of Silicon Valley Bank (SVB) within the United States.
BoE defined {that a} financial institution insolvency process would imply that “eligible depositors” are paid out by the Financial Services Compensation Scheme (FSCS) as much as the “protected limit” of £85,000 (roughly $102,288 USD) or as much as £170,000 (roughly $204,577 USD) for joint accounts, as “quickly” as attainable.
It added that the financial institution liquidators could be liable for managing the remaining SVB UK property and liabilities throughout its insolvency proceedings, with any recoveries “distributed” to its collectors.
Several U.K. enterprise capitalists (VCs), together with Index Ventures and Atomico, issued a joint assertion on Mar. 12 endorsing SVB UK. The assertion expressed assist for SVB UK stating that it’s a “trusted” and “valued partner” that performs a “pivotal” position in supporting startups within the U.K.
A joint assertion for @Jeremy_Hunt & @hmtreasury, from a quantity of main UK enterprise capital funds, in assist of @SVB_UK pic.twitter.com/7dGHh3WHnr
— Atomico (@atomico) March 11, 2023
Related: Banks down? That is why Bitcoin was created, crypto neighborhood says
The Coalition for a Digital Economy, a U.K. non-profit that campaigns for insurance policies to assist digital startups, acknowledged on Mar. 11 that there are a “large number” of startups and traders within the ecosystem who’ve “significant exposure” to SVB UK, including that they are going to be “very concerned.”
Meanwhile, a Mar. 11 Castle Hill report revealed that outstanding blockchain VCs have over $6 billion value of property held by the now-defunct monetary entity.
These embrace $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm, and $560 million from Pantera Capital.
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