The California Department of Financial Protection and Innovation closed Silicon Valley Bank (SVB) on Friday, making it the second bank to do so in recent days.
In a statement, the DFPI said that it had taken control of the bank due to "inadequate liquidity and insolvency." The bank has been placed under the Federal Deposit Insurance Corporation's receivership, according to DFPI, which the FDIC verified.
As of December 31, 2022, Silicon Valley Bank has over $209 billion in total assets and approximately $175.4 billion in total deposits. It is a commercial bank with a state charter and is situated in Santa Clara. According to the DFPI's statement, the FDIC provides federal insurance for its deposits, subject to any relevant caps.
While not being as "crypto-friendly" as Silvergate, the technologically advanced Silicon Valley Bank has a number of crypto entities as clients, especially hedge funds and venture capital firms. According to CoinDesk investigation, the bank apparently has contacts with Blockchain Capital, Castle Island Ventures, Dragonfly, and Pantera.
West Coast rival lender First Republic Bank (FRC) is currently down 15%, and rival lender Western Alliance Bancorp (WAL) is currently down 25%. The crypto-friendly Signature Bank (SBNY) is currently down 13%, adding to its losses.