Read full article at Cointelegraph.com News.
Silicon Valley Bank (SVB) has suffered a significant fall from grace following half a decade of being rated as one of the best banks in the United States.
SVB and its parent company, SVB Financial Group, had been held in high esteem as financial institutions serving companies across a variety of industries, from technology and venture capital firms to private equity clients.
SVB was included on Forbes’ annual list of the best banks in the U.S. for five consecutive years, a point its parent company celebrated on Twitter just a few weeks before its closure under Federal Deposit Insurance Corporation control on March 10.
SVB deleted their twitter account @SVB_Financial
This is what they posted just a few days ago: pic.twitter.com/Tc6EFZhJnn
— Dr. Eli David (@DrEliDavid) March 12, 2023
SVB Financial has since deleted its Twitter account after the California Department of Financial Protection and Innovation ordered it to shut its doors.
The fallout has had a direct, tumultuous effect on the broader cryptocurrency ecosystem, as stablecoin issuer Circle had $3.3 billion in USD Coin (USDC) reserves tied up in the bank. USDC depegged from its $1 mark as a result but has since clawed its way back to near-parity with its fiat-based peg.
Related: Biden vows to hold accountable those responsible for SVB, Signature collapse
Data from Forbes highlights SVB Financial’s stock price performance over the past five years. SIVB hovered between highs of around $325 and $136 between 2018 and the end of 2020. It then hit highs of approximately $759 at the tail end of 2021 before a slow and steady decline alongside the wider cryptocurrency and conventional markets.
SIVB’s share price has since dropped to as low as $100 following the closure of SVB.
William Quigley, co-founder of Tether, shared insights with Cointelegraph following SVB’s shuttering over the weekend. Quigley is also a former venture capitalist with over 10 years of experience as an auditor of failed banks.
According to Quigley, the U.S. Treasury Department has been aware since December 2022 that SVB could not pay all its depositors back, based on federal call reports.
“The Treasury Department continued to let SVB operate and take in more depositors’ cash even as SVB’s fixed asset base continued to drop in value from interest rate hikes.”
Quigley also noted that SVB debt was rated AA by federally regulated statistical rating agency Moody’s and received a clean audit opinion three weeks ago from federally supervised and state-licensed auditing firm KPMG.
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