After SVB crash, CEO of Ripple claims strong financial situation

On March 12, the CEO of Ripple, Brad Garlinghouse, came to Twitter to address the company’s exposure to Silicon Valley Bank and reassure his fans of the company’s viability.

Ripple has exposure to SVB, according to Garlinghouse, but “we envisage no impact on our day-to-day operations and have already held the bulk of our USD with a wider network of bank partners.”

The purpose of his little Twitter thread was to comfort people. “Be assured, Ripple’s financial condition is solid,” he tweeted.

Garlinghouse did not explain how much cash the business had on deposit with SVB.

Several Twitter users who responded to the discussion reacted favorably to the assertion.

“I never suspected you or @Ripple to have exercised sufficient risk management,” one person remarked.

David Schwartz, the chief technical officer of Ripple, had pledged on March 11 that the business would issue a comment on its Ripple exposure “shortly.” However, it is unclear if he had in mind the Garlinghouse tweet.

The Federal Reserve said hours later that it had launched a $25 billion financing program to help banks with liquidity during times of financial stress.

In another release, the Federal Reserve said that the  Silicon Valley Bank depositors will have full access to their funds beginning March 13.

“No taxpayer losses will be linked with the settlement of Silicon Valley Bank,” it stated.

Schwartz said on March 10: “I still do not get how a bank run may lead to its insolvency. If the bank was solvent before, its assets would surpass its liabilities. […] Once their 10-year treasuries matured, they likely would have been financially stable. But they did not get the chance owing to a run.”

Contrary to market trends, the price of Ripple’s XRP fell from a high of $0.40 on March 9 to a low of $0.35 on March 12 before rebounding.

Ripple is embroiled in a legal dispute with the United States Securities and Exchange Commission about the status of its XRP cryptocurrency, but a Ripple official predicted that 2022 will be a “record year of business and client growth” for the firm.

In January, Garlinghouse projected that the matter would be concluded in June.