BlockFi Invested Around $230 Million in Silicon Valley Bank – Are the Funds Safe?
BlockFi disclosed in a recent bankruptcy filing that it had invested $227 million in an uninsured money market mutual fund (MMMF) provided by Silicon Valley Bank (SVB).
The now-defunct cryptocurrency lender’s investment is not covered by the Federal Deposit Insurance Corporation (FDIC) or any other federal government agency and is not guaranteed by the bank.
However, investors in money market mutual funds are issued fund shares in exchange for their capital, which means that BlockFi’s funds may not be at risk despite SVB’s financial difficulties.
SVB offered several mutual fund investment services but did not manage any of the funds itself, instead outsourcing this to big names such as BlackRock, Morgan Stanley, and Western Asset Management.
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Circle, a USD Coin issuer, is one firm that appears to have been directly affected by the SVB closure and the Silvergate bankruptcy, with $8.6 billion of its reserves being held up in several U.S. financial institutions, including SVB, Silvergate, and Bank of New York Mellon.
The value held up in SVB and Silvergate is unclear, and Circle is awaiting clarity on how the FDIC receivership of SVB will impact its depositors.
Alexander Stefanov
Reporter at CoinsPress
Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.
