- The crypto lender was warned of the danger back in early March
- BlockFi Capital Invested in Money Market Mutual Fund Not FDIC Insured
According to a new bankruptcy filing, crypto lender BlockFi, It has $227 million in uninsured funds held in troubled bank Silicon Valley Bank (SVB) fund.
The bank was shut down by California regulators after investors began withdrawing funds. By the way, some failed to do this and lost their assets.
This $227 million is not insured by the Federal Deposit Insurance Corporation, as it is in a money market mutual fund. The FDIC federal deposit insurance covers up to $250,000 per depositor, but does not cover money market funds.
The balance sheet provided by Silicon Valley Bank says:
“Money market mutual fund investment is not a deposit, not FDIC insured, not insured by any federal government agency, not bank guaranteed, may lose value”
Silicon Valley Bank, one of the largest banks in the United States and a key partner for venture capital firms, was the 16th largest bank in the United States and has been in business for over 40 years. On March 10, it was closed by the California Department of Financial Protection and Innovation. The reason for the closure was called “insufficient liquidity and insolvency”