SVB holds nearly $5 billion in crypto VCs

According to a story that started circulating on March 11 after the demise of Silicon Valley Bank (SVB), famous blockchain venture capitalists (VCs) have over $6 billion in assets held by the collapsed financial institution.

Andreessen Horowitz (a16z) contributed $2.85 billion, Paradigm contributed $1.72 billion, and Pantera Capital contributed $560 million.

A16z is actively invested in startups like Alchemy, Sky Mavis, and Yuga Labs, and was formerly an investor in the bitcoin exchange Coinbase.

Among the ventures in which Paradigm has invested are Compound, Cosmos, and Uniswap. In the meanwhile, Pantera Capital has investments in initiatives like 1inch, Ankr, and Zcash.

The report, created by Castle Hall due diligence and derived from filings with the United States Securities and Exchange Commission, provides a snapshot of the VCs’ assets held in custody by SVB.

It does not contain recent withdrawals, deposits, or transfers that occurred after the time of disclosure. In addition, although the aforementioned organizations are renowned crypto investors, not all of SVB’s funds are used for crypto investments.

On March 10, California officials shut down SVB, a major financial lender that served venture capital firms and technology startups.

It was the sixteenth biggest bank in the United States at the time, with about $212 billion in assets.

The likely reason for the failure was a failed leveraged gamble on U.S. government bonds, which resulted in $1.8 billion in losses on its $21 billion portfolio after the U.S. Federal Reserve periodically hiked interest rates over the previous year, substantially reducing bond values.

Despite the relatively small loss, a crisis of trust erupted, resulting in redemption requests totaling tens of billions of dollars within a few days.

According to reports, the corporation has $74 billion in longer-term U.S. Treasury bonds that it has yet to sell to satisfy redemptions. Circle, the issuer of the famous stablecoin USD coin, has $3.3 billion in deposits trapped in SVB at this time.