SVB’s Parent Company Files for Bankruptcy
- SVB Financial Group has filed for a Chapter 11 court-supervised reorganization in the U.S. in order to “preserve value”.
- The company stressed it is no longer affiliated with Silicon Valley Bank, the closure of which sent ripples across the crypto industry.
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The parent company of Silicon Valley Bank, SVB Financial Group, has filed for Chapter 11 bankruptcy protection in the United States to preserve value, the company said in a press release on 17 March.
According to the announcement, SVB Financial Group filed for a court-supervised reorganization in the U.S. Bankruptcy Court for the Southern District of New York. The company noted that the funds of its venture capital arm SVB Capital, broker dealer SVB Securities, and those of general partner entities were not included in the Chapter 11 bankruptcy filing. SVB Financial Group’s chief restructuring officer, William Kosturos, said in a statement:
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic alternatives for its prized businesses and assets, especially SVB Capital and SVB Securities. SVB Capital and SVB Securities continue to operate and serve clients, led by their longstanding and independent leadership teams.”
The company has estimated that it has around $2.2 billion in liquidity, in addition to “other valuable investment securities accounts and other assets”. SVB Group also has funded debt of about $3.3 billion in aggregate principal amount of unsecured notes, which are “only recourse” to SVB Group, and $3.7 billion of preferred equity outstanding.
SVB Group also stressed that it is no longer affiliated with Silicon Valley Bank (SVB) — which was shut down by regulators last week — or the bank’s private banking and wealth manager SVB Private. The collapse of SVB affected not only the traditional banking world, but also the cryptocurrency industry, with the USDC stablecoin losing its peg to the U.S. dollar after Circle revealed it could not withdraw $3.3 billion of the USDC reserve from SVB. The stablecoin recovered after Circle found a new banking partner.
- A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
- The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
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- The digital ID project said Orb Operators received USDC payments as part of the project’s transitional phase after launch, and now that it is nearing its end Worldcoin will be switching to WLD payments.
- Worldcoin warned Orb Operators to check if they can claim rewards in their region as WLD are not available in the United States and “certain other restricted territories”.
- The bankrupt crypto lender said that if its reorganization plan is approved, it is ready to start repaying its customers using $2 billion in BTC and ETH by the end of the year.
- If given the green light, Celsius will restart its business under the “NewCo” brand without any funded debt, and with seed funding of up to $450 million.