Californian commercial bank Silicon Valley Bank (SVB) shuddered markets on Friday after the California Department of Financial Protection and Innovation said it had taken over the bank, citing "inadequate liquidity and insolvency."
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In a press release, the financial regulator also added it had appointed the Federal Deposit Insurance Corporation as receiver of Silicon Valley Bank. Amid the news, shares of the bank's parent company SVB Financial Group (NASDAQ: SIVB) plunged over 60% to $106.5, according to data from Yahoo Finance.
SVB had many notable clients in its portfolio, including venture giant Andreessen Horowitz (a16z), Pantera Capital and many others. Among its crypto-related clients, it was suddenly revealed that the bank had over $3.3 billion in cash of Circle's reserves for the USDC stablecoin.
The revelation hit like a bombshell, resulting in the de-peg as the stablecoin lost 13% to $0.87, according to CoinGecko. However, over the weekends, the stablecoin succeeded to regain up to $0.95.
The Santa Clara-headquartered bank was the 16th largest financial institution in the US as of December 2022, with about $209 billion in assets. The sudden collapse made SVB the largest bank to fail since the financial crisis of 2008.
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