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 Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
