The Bank of England (BoE) has halted the operations of Silicon Valley Bank’s U.K. branch (SVB UK), stating that it has a “limited presence” and no “critical functions” supporting the financial system in the United Kingdom (UK).
BoE issued a statement on Mar. 10, declaring that SVB UK will “stop making payments or accepting deposits,” as BoE intends to apply to the court to place SVB UK into a “Bank Insolvency Procedure.”
This follows news on the same day that the California Department of Financial Protection and Innovation ordered the closure of Silicon Valley Bank (SVB) in the United States.
BoE explained that a bank insolvency procedure would mean that “eligible depositors” are paid out by the Financial Services Compensation Scheme (FSCS) up to the “protected limit” of £85,000 (approximately $102,288 USD) or up to £170,000 (approximately $204,577 USD) for joint accounts, as “quickly” as possible.
It added that the bank liquidators would be responsible for managing the remaining SVB UK assets and liabilities during its insolvency proceedings, with any recoveries “distributed” to its creditors.
Several U.K. venture capitalists (VCs), including Index Ventures and Atomico, issued a joint statement on Mar. 12 endorsing SVB UK. The statement expressed support for SVB UK stating that it is a “trusted” and “valued partner” that plays a “pivotal” role in supporting startups in the U.K.
A joint statement for @Jeremy_Hunt & @hmtreasury, from a number of leading UK venture capital funds, in support of @SVB_UK pic.twitter.com/7dGHh3WHnr
– Atomico (@atomico) March 11, 2023
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The Coalition for a Digital Economy, a U.K. non-profit that campaigns for policies to support digital startups, stated on Mar. 11 that there are a “large number” of startups and investors in the ecosystem who have “significant exposure” to SVB UK, adding that they will be “very concerned.”
Meanwhile, a Mar. 11 Castle Hill report revealed that prominent blockchain VCs have over $6 billion worth of assets held by the now-defunct financial entity.
These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm, and $560 million from Pantera Capital.