The Bank of England (BoE) has halted the operations of Silicon Valley Bank’s United Kingdom branch (SVB U.K.), stating that it has a “limited presence” in the U.K. and no “critical functions” supporting the financial system.
BoE stated on March 10, declaring that SVB U.K. will “stop making payments or accepting deposits,” as BoE intends to apply to the court to place SVB U.K. into a “Bank Insolvency Procedure.”
This follows the closure of SVB by the California Department of Financial Protection and Innovation.
The BoE explained that a bank insolvency procedure would mean that “eligible depositors” are paid out by the Financial Services Compensation Scheme up to the “protected limit” of £85,000 (approximately $102,288) or up to £170,000 (approximately $204,577) for joint accounts, as “quickly” as possible.
It added that the bank liquidators would manage the remaining SVB U.K. assets and liabilities during its insolvency proceedings, with any recoveries “distributed” to its creditors.
Several U.K. venture capitalists (VCs), including Index Ventures and Atomico, issued a joint statement on March 12 endorsing SVB U.K. The statement expressed support for SVB U.K., stating that it is a “trusted” and “valued partner” that plays a “pivotal” role in supporting startups in the U.K.
A joint statement for @Jeremy_Hunt & @hmtreasury, from a number of leading UK venture capital funds, in support of @SVB_UK pic.twitter.com/7dGHh3WHnr
— Atomico (@atomico) March 11, 2023
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The Coalition for a Digital Economy, a U.K. nonprofit that campaigns for policies to support digital startups, stated on March 11 that there are a “large number” of startups and investors in the ecosystem who have “significant exposure” to SVB U.K., adding that they will be “very concerned.”
Meanwhile, a March 11 Castle Hill report revealed that prominent blockchain VCs have over $6 billion in assets at the now-defunct bank.
These include $2.85 billion from Andreessen Horowitz, $1.72 billion from Paradigm and $560 million from Pantera Capital.
