The United Kingdom branch of Silicon Valley Bank has had its operations suspended by the Bank of England (BoE).
The Bank of England (BoE) has halted the operations of Silicon Valley Bank’s United Kingdom branch (SVB U.K.) stating that it has a “limited presence” in the U.K. and no “critical functions” supporting the financial system.
SVB U.K. will “stop making payments or accepting deposits,” according to a statement made by BoE on March 10; BoE plans to ask the court to put SVB U.K. into a “Bank Insolvency Procedure.”
This comes after the California Department of Financial Protection and Innovation shut down SVB. The BoE explained that a bank insolvency procedure would mean that “eligible depositors” are paid out by the Financial Services Compensation Scheme up to the “protected limit” of £85,000 (approximately $102,288) or up to £170,000 (approximately $204,577) for joint accounts, as “quickly” as possible.
It further stated that during its insolvency proceedings, the bank liquidators would manage the remaining SVB U.K. assets and liabilities, with any recoveries “distributed” to its creditors.
On March 12, a number of venture capitalists (VCs) in the UK, including Index Ventures and Atomico, released a statement supporting SVB U.K. SVB U.K. was praised in the statement, which claimed that it is a “trusted” and “valued partner” who supports startups in the U.K. in a “pivotal” way.
A U.K. nonprofit organization called the Coalition for a Digital Economy claimed on March 11 that a “large number” of startups and investors in the ecosystem have “significant exposure” to SVB U.K. and that this will cause them to be “very concerned.”
According to a March 11 Castle Hill article, well-known blockchain VCs hold assets worth over $6 billion at the now-defunct bank. Included in these are $560 million from Pantera Capital, $1.72 billion from Paradigm, and $2.85 billion from Andreessen Horowitz.
