BlockFi Stuck $227 million at Silicon Valley Bank

Recently bankrupt crypto lender firm BlockFi was heavily affected by the collapse of Silicon Valley Bank.

BlockFi Stuck $227 million at Silicon Valley Bank

The Silicon Valley bank, affiliated with SVC Financial Group, has filed for bankruptcy due to the recent crises. BlockFi, which was affected by the FTX crisis last year and filed for bankruptcy as a result, suffered another blow in the process of getting back on its feet.

BlockFi’s $227 Million Investment

BlockFi was heavily hit by the collapse of the Silicon Valley Bank. The company had recently invested $227 million in a money market mutual fund launched by Silicon Valley Bank. Because the investment was uninsured, the crypto lender’s name is not on the list of those protected by the Federal Deposit Insurance Corporation in the Silicon Valley bank’s bankruptcy filing.

Can the Company Get the Money Back?

The U.S. Trustee, an agency of the Department of Justice, confirmed that BlockFi held $227 million in uninsured cash at the Silicon Valley bank. Since the company’s money in the bank is not an insured account protected by the FDIC, the money is not covered by any guarantee by the government or the bank.

The company also reportedly ignored warnings about uninsured accounts. This is not the only firm to have been hit hard by the collapse of the Silicon Valley bank. On March 11, stablecoin declines sent a wave of mistrust back into the market. USDC, USDD, and DAI plummeted after the bank collapse.

Reference

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