Just-In: Silicon Valley Bank Likely To Be Sold To Another Bank And Not VCs

Read full article at Coingape.

According to recent reports, the United States government will most certainly sell the now-defunct Silicon Valley Bank to another major bank. This effectively eliminates the possibility of a bid being placed by the private equity firms and venture capitalists that had been considering buying the troubled financial institution.

SVB To Be Sold As A Whole

The Federal Deposit Insurance Corporation (FDIC) took control of SVB after the bank failed on Friday, and the officials are currently working to sell the company. As per information obtained from outlets familiar with the sales process stated that there was virtually no possibility that SVB could be segregated into pieces and parcelled out to a private equity firm. Moreover, the primary goal is to sell what is left of the bank in one piece.

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However, these processes may take time due to the ongoing investigation initiated by the U.S. SEC and the Department of Justice. The inquiry comes after regulators last week took control of the California-based financial institution, which primarily served venture capitalists and tech startups spread across the globe.

The SVB Fiasco

The collapse of SVB started last week when it announced that it needed to raise $2.25 billion to rebuild its balance sheet. Both venture capital firms and their portfolio companies instructed their companies to withdraw deposits, while other clients scrambled to get their funds out of the bank before it became unavailable. This ultimately led to the classic example of a “bank run”.

The bank apparently held deposits totaling around $175 billion and assets worth $209 billion before it abruptly collapsed. The Silicon Valley Bank’s demise made it the biggest financial institution in the country to fail since the 2008 financial crisis and is presently being sued by its shareholders on allegations of fraud.

Also Read: Coinbase Delists 6 Top Altcoins Following Internal Review

The post Just-In: Silicon Valley Bank Likely To Be Sold To Another Bank And Not VCs appeared first on CoinGape.

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