• Three crypto venture capital firms, Paradigm, Pantera Capital, and Andreessen Horowitz (a16z), may have over $5b tied up in Silicon Valley Bank (SVB).
• Unconfirmed data from the US Securities and Exchange Commission’s ADV file shows that a16z-related funds had $2.85b in SVB, Paradigm-related funds was $1.72 billion and Pantera-related funds was $560 million as of May 6, 2022.
• The California Department of Financial Protection and Innovation recently shut down SVB resulting in a crisis of confidence amidst redemption demands for tens of billions of dollars.
Crypto Venture Funds Investing with Silicon Valley Bank
Three crypto venture capital firms, Paradigm, Pantera Capital, and Andreessen Horowitz (a16z), may have over $5b tied up in Silicon Valley Bank (SVB). Unconfirmed data from the United States Securities and Exchange Commission’s ADV file shows that a16z-related funds had $2.85b in SVB as of May 6th 2022. Meanwhile, Paradigm-related funds was $1.72 billion and Pantera-related funds was $560 million according to recent SEC filings.
Silicon Valley Bank Shut Down
The California Department of Financial Protection and Innovation recently shut down SVB resulting in a crisis of confidence amidst redemption demands for tens of billions of dollars. This has led to concerns about the safety of assets held by crypto firms in traditional financial institutions such as Circle’s stablecoin issuer USDC which currently has $3.3b worth deposits stuck with the lender struggling to maintain its USD peg value at 1:1 ratio.
Crypto Regulation is Evolving
The crypto industry has been largely unregulated for years but it is gradually evolving which leads more investors opting for financial institutions instead decentralised exchanges due to better insurance coverage offered by them while trading digital assets or holding cryptocurrencies such as Bitcoin or Ethereum.
FDIC Receiver Appointed by Regulator
When SVB was placed under receivership by the regulator on Mar 10th 2021 , FDIC was appointed as receiver for all the assets held by it including those belonging to cryptocurrency venture capital firms mentioned above . However scraped data from SEC does not provide any information on amount these VCs still hold within it .
Conclusion
It remains unclear how much money exactly these three Crypto VCs have invested with SVB however investors should remain cautious when investing using conventional financial institutions due to lack transparency surrounding their operations especially during times like this where uncertainty prevails regarding their ability to protect customer’s assets at all times .