Financial Collapse of Silicon Valley Bank Leaves Crypto VCs with Over $5B in Assets: Report


A report released on March 11 has revealed that several prominent venture capitalists in the cryptocurrency space have had over $5 billion worth of assets held by the now-defunct Silicon Valley Bank (SVB). These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.

A16z, which has made investments in projects such as Alchemy, Sky Mavis and Yuga Labs, was previously an investor in the cryptocurrency exchange Coinbase. Paradigm has backed companies such as Compound, Cosmos and Uniswap, and Pantera Capital holds stakes in projects such as 1inch, Ankr and Zcash.

The report, compiled by Castle Hall due diligence and extracted from United States Securities and Exchange Commission filings, is a snapshot of the VCs’ assets in custody with SVB. It does not include any updates such as recent withdrawals, deposits or transfers after the time of disclosure. Furthermore, while these funds are prominent investors in the crypto space, not all assets held by SVB are used for crypto investments.

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SVB, a major financial provider to venture capital firms and tech companies, was forced to close by California regulators on March 10. At that point, it was the 16th largest bank in the U.S., with over $212 billion in assets. The cause of the collapse was supposedly a failed leveraged bet on U.S. Treasury bonds that resulted in $1.8 billion of losses on its $21 billion portfolio, as the U.S. Federal Reserve repeatedly increased interest rates this past year, causing a steep drop in the prices of bonds.

Despite the comparatively small loss, a crisis of confidence ensued, leading to tens of billions of dollars in redemption demands in just a few days. The company reportedly still has $74 billion of longer-term U.S. Treasurys, which it has yet to liquidate to meet redemptions. Circle, the issuer of the popular USD Coin (USDC) stablecoin, has around $3.3 billion of deposits stuck in SVB.