Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation. The Federal Deposit Insurance Corporation was appointed as the receiver. The FDIC created the Deposit Insurance National Bank of Santa Clara to protect insured depositors.
All insured deposits at Silicon Valley Bank, popular with start-ups and venture capitalists, were immediately transferred to DINB. Insured depositors will have access to their insured deposits by March 13, according to an FDIC announcement.
Silicon Valley Bank became the first FDIC-insured institution to fail this year, the previous being Almena State Bank, of Almena, Kansas, in 2020.
Trading in Silicon Valley Bank was halted shortly before 9 a.m. EST, but not before after shares plunged 63% in pre-market trading. Shares dropped 60% on Thursday.
The closure comes two days after La Jolla, California-based crypto-friendly bank Silvergate announced plans to wind down operations.
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