Report: Tech Giants Were Among Uninsured Depositors Covered by FDIC
BY PYMNTS | JUNE 23, 2023
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The Federal Deposit Insurance Corporation’s guarantee of uninsured accounts at Silicon Valley Bank reportedly included companies that would have been in no real danger.
While President Joe Biden and Treasury Secretary Janet Yellen described the FDIC’s move as an effort to protect small businesses, workers and households, FDIC documents show that it also covered tech industry giants with assets greater than their deposits at the failed bank, Bloomberg reported Friday (June 23).
Bloomberg said it based its report on FDIC documents that the agency said it mistakenly released in unredacted form to the media outlet. The FDIC also asked Bloomberg to destroy the documents and not share their contents, according to the report.
Reached by PYMNTS, the FDIC declined to comment on the report.
Circle Internet Financial was listed in the documents as the largest depositor at Silicon Valley Bank, with a $3.3 billion balance, according to the report.
Circle disclosed in a March 11 company update that it had $3.3 billion of USDC’s cash reserves remaining with Silicon Valley Bank at the time the FDIC took over the bank.
The company then announced in a March 12 press release that it would be made whole by U.S. regulators along with all other depositors at Silicon Valley Bank.
Silicon Valley Bank was closed and taken over by the California Department of Financial Protection and Innovation (DFPI) March 10 after the bank was beset by customer withdrawals and plummeting stock prices.
The DFPI appointed the FDIC as the receiver.
The FDIC and the U.S. Treasury announced March 12 that the bank’s depositors would be covered and would have access to their funds March 13.
When the regulators’ takeover of Silicon Valley Bank was announced, there had been uncertainty around the status of funds of the uninsured depositors who had accounts with more than the $250,000 covered by the FDIC.
In their announcement that depositors would be able to access their funds, the Federal Reserve, FDIC and Treasury said: “This step will ensure that the U.S. banking system continues to perform its vital roles of protecting deposits and providing access to credit to households and businesses in a manner that promotes strong and sustainable economic growth.”
