UK branch of Silicon Valley Bank closed by Bank of England

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The Bank of England (BoE) has halted operations of the UK branch of Silicon Valley Banks (SVB UK), saying it has a limited presence in the United Kingdom (UK) and no critical functions supporting the financial system.

The BoE issued a statement on March 10 stating that SVB UK will stop making payments or taking deposits as the BoE intends to ask the court to place SVB UK into bank insolvency proceedings.

This follows the same day’s announcement that the California Department of Financial Protection and Innovation ordered the shutdown of Silicon Valley Bank (SVB) in the United States.

The BoE explained that a bank insolvency proceeding would mean that eligible depositors would be paid by the Financial Services Compensation Scheme (FSCS) up to the protected limit of 85,000 (approximately US$102,288) or up to 170,000 ( approximately $204,577) for joint accounts, such as As Fast As Possible.

He added that the bank’s liquidators would be responsible for managing SVB UK’s remaining assets and liabilities during its insolvency proceedings, with any recovery being distributed to its creditors.

Several UK venture capital (VC) firms, including Index Ventures and Atomico, released a joint statement on March 12 endorsing SVB UK. The statement expressed support for SVB UK stating that it is a trusted and valued partner that plays a central role in supporting startups in the UK.

A joint statement for @Jeremy_Hunt & @hmtreasury, from a number of leading UK venture capital funds, in support of @SVB_UK pic.twitter.com/7dGHh3WHnr

Atomic (@atomic) March 11, 2023

Related: Banks Failing? This is why Bitcoin was created, according to the crypto community

The Coalition for a Digital Economy, a British non-profit organization that campaigns for policies to support digital startups, said on March 11 that there are a large number of startups and investors in the ecosystem who have a significant exposure to SVB UK, adding that they will be very worried.

Meanwhile, a Castle Hill report from March 11 revealed that prominent blockchain VCs held more than $6 billion in assets held by the now-defunct financial entity.

These include $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.

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