US Senators Demand Answers from SVB’s Clients on $3.3 Billion Deposit
Two United States senators are gathering information on Silicon Valley Bank clients and their large deposits into the failed institution.
US senators, Elizabeth Warren and Alexandria Ocasio-Cortez, have written an open letter to 14 of Silicon Valley Bank’s (SVB) top clients, including Circle and BlockFi, inquiring about the relationship between the bank and its depositors.
The senators are seeking information on the decision-making process behind Circle’s $3.3 billion deposit with SVB and its rationale.
They also want to know whether Circle or its board members had any concerns about holding such a large quantity of non-FDIC insured assets.
SVB’s downfall has raised concerns about its overdependence on tech industry firms and investors, as well as the abnormally high percentage of deposits that were not insured by FDIC.
Additionally, the role that companies like Circle may have played in precipitating the $42 billion single-day-run on SVB is also a cause for concern.
The senators deem gathering details about these elements vital to develop strategies for averting future collapses. The senators have set a deadline of April 24 for the companies to address their inquiries.