Circle was SVB’s biggest client: report

The stablecoin issuer’s SBV holdings were backstopped by the FDIC

article-image

Circle CEO Jeremy Allaire | Eóin Noonan for MoneyConf (CC license)

share

Turns out that, at least for a time, stablecoin issuer Circle was reportedly the single largest asset-weighted customer of Silicon Valley Bank. 

Silicon Valley Bank (SVB) collapsed earlier this year, with the venture capital banking favorite going down as one of a series of overextended US banks that met their demise amid mounting withdrawal pressure. 

Citing a Freedom of Information Act (FOIA) request, Bloomberg reported on Friday that Circle was the top depositor at SVB. Circle does business as Circle Internet Financial. 

Loading Tweet..

Bloomberg reported that the Federal Deposit Insurance Corp. told the publication that the document in question was inadvertently released in its unredacted form.

An FDIC spokesperson declined to comment to Blockworks, and a spokesperson for Circle did not immediately reply to a request for comment. 

Circle held about $3.3 billion at SVB around the time of the bank’s collapse in March, and the USDC issuer then pledged to “stand behind USDC.” The document obtained by Bloomberg states the Circle held the top spot in a ranking of both the top 10 depositors and the top 10 accounts — suggesting that Circle maintained more than one account at SBV. 

The FDIC stepped in to insure all SBV deposits after the bank went under, not just deposits under the federal agency’s typical $250,000 threshold. 

Circle’s USDC stablecoin had depegged from its one-to-one dollar mooring when SBV headed for bankruptcy, raising crypto industry questions as to the extent of the damage from ties to SBV and other banks that went on to fail, including Signature and Silvergate. 

Circle in the aftermath started doing due diligence on and tapping a number of new prospective banking partners, including striking an agreement with Cross River Bank, to facilitate the usage and transfer of USDC and the company’s other products. 

Read more: After Bank Failures, Where Will Crypto Firms Turn?

Dollar-pegged stablecoins booked a relatively quick recovery after their initial demooring. Ample is crucial to ensuring stablecoins adhere closely to the price of the asset they are pegged against.


Don’t miss the next big story – join our free daily newsletter.

Tags

Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

Mon - Wed, March 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience: Attend expert-led panel discussions and fireside chats Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts.

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research report - cover graphics (1).jpg

Research

In this report, we dive into crypto private market data to gather insights on where the future of the industry is headed. Despite a notable downturn in private raises, capital continues to infuse promising projects that aim to transform payments, banking, consumer experiences, community, and more, with 2023 being the fourth-largest year for crypto venture capital.

article-image

BUZZ holds shares of Coinbase, Robinhood and MicroStrategy

article-image

Opinion: Even though I didn’t pay for my “Diamond Hands” burger with BTC, don’t let that fool you into thinking that crypto’s development is futile

article-image

The results mark “a major positive inflection point,” one analyst says, as the exchange carries net income momentum into a crypto rally

article-image

While the slate of 10 US spot bitcoin funds have tallied $4.6 billion of net inflows thus far, half of the field is lagging the leaders

article-image

Trading volumes totalled $154 billion in Q4, including $125 billion in institutional volume

article-image

DeFi on Bitcoin is all the rage right now and Stacks is positioned to benefit