The Federal Deposit Insurance Corporation (FDIC) can only guarantee insurance on deposits up to $250,000.
On Friday, federal regulators seized the Silicon Valley Bank (SVB) following a run on the bank, and streaming device company Roku said that 26 percent of its cash and equivalents, approximately $487 million, had been deposited with the bank with the Federal Deposit Insurance Corporation (FDIC) only guaranteeing insurance on deposits up to $250,000.
According to the New York Post, in a regulatory filing, Roku claimed its "deposits with SVB were largely uninsured, sending its shares down 10 percent in extended trading."
On Friday, following the news that the Federal Deposit Insurance Corporation (FDIC) seized SVB, a significant banking institution for venture-backed companies, about a dozen investors showed up at the bank to withdraw money.
SVB called the cops on those who arrived at their Park Avenue branch location.
On Wednesday, SVB announced they were looking to raise over $2 billion in capital due to a $1.8 billion loss on asset sales and the run occurred soon after.
A "run on" a bank happens when those who have deposited money with the bank start withdrawing cash all at the same time. It usually follows concerns that the bank will fold or would be otherwise unable to pay out their deposits in a timely fashion and in full.
Prior to the run on SVB, on Thursday shares of their parent company fell 60 percent and on Friday another 60.
Unusual Whales reports that other companies affected by SVB's collapse include BlockFi with $247 million at the bank, Ambarella with $17 million, and Circle with $3.3 billion.
According to the New York Post, "Online gaming firm Roblox also said it had about $150 million in deposits with SVB."
The FDIC's standard insurance only covers up to $250,000 per depositor, per bank and the Wall Street Journal reports those with more than that amount will be given receivership certificates for their uninsured balances.
SVB's fall is the biggest bank failure since the 2008 Great Recession when Washington Mutual collapsed.
According to a press release, the FCIA said they were appointed by the California Department of Financial Protection and Innovation after they closed SVB.
Join and support independent free thinkers!
We’re independent and can’t be cancelled. The establishment media is increasingly dedicated to divisive cancel culture, corporate wokeism, and political correctness, all while covering up corruption from the corridors of power. The need for fact-based journalism and thoughtful analysis has never been greater. When you support The Post Millennial, you support freedom of the press at a time when it's under direct attack. Join the ranks of independent, free thinkers by supporting us today for as little as $1.
Remind me next month
To find out what personal data we collect and how we use it, please visit our Privacy Policy
