Failed tech bank SVB held over $5B for prominent crypto VCs: Report

by · March 11, 2023

According to a report that began circulating on March 11 in the wake of the collapse of Silicon Valley Bank (SVB), prominent blockchain venture capitalists (VCs) have over $6 billion worth of assets held by the now-defunct financial entity. These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.

A16z currently has active investments in projects such as Alchemy, Sky Mavis and Yuga Labs, and was previously an investor in cryptocurrency exchange Coinbase. Paradigm has invested in projects such as Compound, Cosmos and Uniswap. Meanwhile, Pantera Capital has stakes in projects such as 1inch, Ankr and Zcash.

The report, prepared by Castle Hall due diligence and drawn from United States Securities and Exchange Commission documents, is a point-in-time disclosure of VCs’ assets held in custody by SVB. It does not include updates such as recent withdrawals, deposits or transfers after the time of publication. Additionally, while the aforementioned firms are prominent investors in the crypto space, not all of the assets held by SVB are used in crypto investments.

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SVB, a major financial lender serving venture capital firms and technology companies, was shut down by California regulators on March 10. At the time, it was the 16th largest bank in the United States, with over $212 billion in assets. The cause of the collapse was apparently a failed bet on U.S. Treasuries that saw $1.8 billion in losses on the $21 billion portfolio after the U.S. central bank repeatedly raised interest rates over the past year — driving down bond prices sharply.

Despite the relatively small loss, a crisis of confidence followed, leading to tens of billions of dollars in redemption demands within a couple of days. The company reportedly has $74 billion left in long-term U.S. Treasuries, which it has yet to liquidate to meet redemptions. Circle, the issuer of the popular USD Coin (USDC) stablecoin, currently has $3.3 billion in deposits locked up in SVB.