Tech Bank SVB Collapse Leaves Over $5B in Crypto VC Possessions: Report

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A new report has emerged in the aftermath of the Silicon Valley Bank (SVB) collapse, revealing that prominent blockchain venture capitalists (VCs) have over $6 billion worth of assets locked in the now-defunct financial entity. This includes $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.

A16z currently holds active investments in projects like Alchemy, Sky Mavis and Yuga Labs, and was previously a Coinbase investor. Paradigm has taken part in investments such as Compound, Cosmos and Uniswap, while Pantera Capital has stakes in 1inch, Ankr and Zcash.

The report, which was composed by Castle Hall due diligence and sourced from United States Securities and Exchange Commission filings, gives a snap-shot of the VCs’ funds held in custody by SVB. It does not include updates such as recent withdrawals, deposits or transfers after the time of disclosure. Additionally, while the mentioned firms are prominent crypto investors, not all of their assets held by SVB are used in crypto investments.

List of prominent crypto stakeholders and VCs’ reactions to the USDC depegging event | Source: Crypto_HD

SVB, a major financial lender for venture capital firms and tech companies, was shut down by California regulators on March 10. At the time, it was the 16th largest bank in the U.S., with over $212 billion in assets. The cause of the collapse was apparently a failed leveraged bet on U.S. treasury bonds that resulted in $1.8 billion in losses on its $21 billion portfolio after the U.S. Federal Reserve increased interest rates this past year, driving down bond prices.

The relatively small loss sparked a crisis of confidence, resulting in tens of billions of dollars of redemption demands in a few days. The company reportedly has $74 billion left of longer-term U.S. Treasurys, which have yet to be liquidated in order to meet the redemptions. USD Coin (USDC) issuer Circle currently has $3.3 billion worth of deposits stuck in SVB.

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