Silicon Valley Bank UK Closed by Bank of England (BoE)

• The bank liquidators would be responsible for handling the remaining SVB UK assets.
• Major blockchain VCs had over $6 billion in assets with the bankrupt financial firm.

In a statement made on March 10th, the Bank of England (BoE) announced that SVB UK will “stop making payments or accepting deposits” because BoE planned to petition the court to initiate a “Bank Insolvency Procedure” against SVB UK.

As Silicon Valley Bank’s U.K. branch (SVB UK) has no “critical functions” supporting the UK’s financial system, the Bank of England (BoE) has suspended its activities. This comes on the heels of reports on the same day that Silicon Valley Bank (SVB) in the United States was shut down by order of the California regulators.

According to BoE, the Financial Services Compensation Scheme (FSCS) will immediately pay out to “eligible depositors” up to the “protected limit” of £85,000 (about $102,288 USD) or up to £170,000 (approximately $204,577 USD) for joint accounts in the event of a bank insolvency procedure.

Digital Entrepreneurs at Loss

It said that the bank liquidators would be responsible for handling the remaining SVB UK assets and obligations throughout its bankruptcy proceedings, with any recovery “distributed” to its creditors.

On March 12, a group of U.K. VCs including Index Ventures and Atomico released a statement in support of SVB UK. The statement backed SVB UK, calling it a “trusted” and “valued partner” that plays a “pivotal” role in assisting British entrepreneurs.

On March 11, the Coalition for a Digital Economy, a British nonprofit that advocates for laws to aid digital entrepreneurs, said that a big number of companies and investors in the ecosystem had substantial exposure to SVB UK and that they would be extremely worried.

On the other hand, a Castle Hill analysis from March 11 showed that major blockchain VCs had over $6 billion in assets with the bankrupt financial firm.