Mar 11, 2023
SVB Shut Down by California Regulator
Silicon Valley Bank, a major financial institution for venture-backed companies, was forced to close its doors on March 10, becoming the first FDIC-insured bank to fail in 2023.
The California Department of Financial Protection and Innovation (DFPI) confirmed the closure of Silicon Valley Bank (SVB) and appointed the FDIC as the receiver to protect insured deposits. DFPI stated that insured depositors would have access to their funds no later than March 13. Uninsured depositors will be given a “receivership certificate” for the remaining amount of their uninsured funds, and will be entitled to future dividend payments once the FDIC sells all of SVB’s assets.
SVB operated 17 branches across California and Massachusetts and all branches and the main office will be open on March 13 to facilitate depositor access. The bank was one of the top 20 largest banks in the US by total assets and provided services to crypto-focused venture firms, such as Andreessen Horowitz and Sequoia.
The bank’s downfall was swift, coming less than 48 hours after management disclosed that they needed to raise $2.25 billion in stock to shore up operations. This announcement was part of SVB’s mid-quarter financial update, where it disclosed the sale of $21 billion in securities at a $1.8 billion loss.
The stock (SIVB) was trading north of $280 at the start of the week, but before trading was halted, it was worth only $106.08. The 60% drop was the biggest single-day wipeout in history, according to The Wall Street Journal.
The closure of Silicon Valley Bank is a major blow to the web3 space, as it was a major financial supporter of NFTs and other crypto-related projects. Many startups and companies in the web3 space have been relying on the bank’s services to promote and sell their NFTs.
The closure of SVB will leave many web3 companies and startups without a reliable source of funding. As a result, they will have to look for alternative sources of financing, such as venture capital, private equity, and crowdfunding.
To make up for the lack of funding, some startups and companies in the web3 space are turning to NFT marketing to promote their projects and sell their NFTs. NFT marketing is a form of digital marketing that leverages social media platforms, such as Twitter, to promote NFTs and generate interest in them.
NFT marketing is becoming increasingly popular as it provides a more cost-effective way for web3 companies to promote their projects and sell their NFTs. It also offers the potential to reach a larger audience, as social media platforms have billions of active users.
In the wake of Silicon Valley Bank’s closure, web3 companies and startups will have to rely more heavily on NFT marketing to promote their projects and sell their NFTs. To take full advantage of this new form of marketing, many web3 companies are turning to NFT marketing agencies to help them create and execute effective NFT marketing campaigns.
NFT marketing agencies specialize in creating and executing campaigns that are tailored to the needs of their clients. They have the expertise to create campaigns that are designed to reach the right audience and generate interest in the NFTs.
The closure of Silicon Valley Bank is a major blow to the web3 space, but it also presents an opportunity for web3 companies and startups to leverage NFT marketing to promote their projects and sell their NFTs. With the help of NFT marketing agencies, web3 companies and startups can create effective campaigns that will help them reach a larger audience and generate more interest in their NFTs.
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