Silicon Valley Bank’s parent firm files for bankruptcy as Bitcoin surges over 30% in one week
The parent company of Silicon Valley Bank announces it is filing for bankruptcy as the price of Bitcoin (BTC) soars 30% in a week.
In a new press release, SVB Financial Group, the conglomerate that owns SVB, says it will file for Chapter 11 bankruptcy as a means of preserving assets.
Although other parts of the company, such as SVB Capital and SVB Securities, are healthy, the group decided to file for bankruptcy as it does not have enough liquidity to cover SVB’s debts.
“SVB Financial Group announced today that it has filed a voluntary petition for a judicially supervised Chapter 11 reorganization in the United States Bankruptcy Court for the Southern District of New York to preserve its value.
SVB Securities and SVB Capital’s funds and general partner entities are not included in the Chapter 11 filing and continue to operate in the ordinary course as SVB Financial Group continues its previously announced exploration of strategic options for these valuable businesses.”
The firm says it filed for bankruptcy so that it would not have to plunder the assets of the other subsidiaries to pay off SVB’s debts.
As stated by William Kosturos, Head of Restructuring for SVB Financial Group, in the press release,
“The Chapter 11 process will allow SVB Financial Group to preserve value as it evaluates strategic options for its valuable businesses and assets, particularly SVB Capital and SVB Securities. SVB Capital and SVB Securities continue to operate and serve clients, led by their long-standing and independent leadership team.”
SVB’s problems began last week when the infection spread to other banks. Turmoil in the banking sector sent the crypto king into flight as BTC went from around $19,500 on March 10 to today’s price of $26,387, a 30% increase.
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