No thanks to the use of Silvergate, thousands of other start-ups, including those in crypto-related space, are now left without banking and payments services, feeling befuddled about how and where they stand, directly or indirectly.
Recently, a couple of jolts from across the Pacific Ocean were felt in this part of the world, when Silicon Valley Bank (SVB), which has for decades served the area it’s named after, went under. Last weekend, as news of the largest US bank collapse since the Global Financial Crisis unfolded, I woke up to emails from startups declaring that they have either zero direct exposure or de minimis indirect exposure via service providers to SVB.
As it turns out, these proactive start-ups are in a better position. Just a week before the bank run picked up pace on SVB, another bank, Silvergate Bank (trading as Silvergate Capital Corp), had been unwinding — marking the first failure of a bank backed by the US Federal Deposit Insurance Corp (FDIC) since 2020.
