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Circle Was Top Depositor Aided by SVB Government Rescue: Bloomberg
The FDIC guarantee included over $3.3 billion the USDC stablecoin issuer held at the lender.
Updated Jun 23, 2023, 2:19 p.m. Published Jun 23, 2023, 2:19 p.m.
USDC stablecoin issuer Circle was the top depositor helped by a government-backed guarantee of Silicon Valley Bank, according to Federal Deposit Insurance Corporation (FDIC) documents seen by Bloomberg.
Regulators stepped in to protect creditors of the bank after it collapsed in March. They argued the move was needed to restore confidence and aid the economy, but reignited a debate over whether the government was effectively allowing financiers to take excessive risk.
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Circle Internet Financial, which said at the time it had $3.3 billion in holdings at the bank, was followed in the list of top depositors by units of the bank itself, and then by tech-focused venture capital firm Sequoia with just over $1 billion, according to documents sent by the FDIC to Bloomberg under the Freedom of Information Act which were not redacted for commercially sensitive data, in an apparent mistake by the regulator.
After SVB exposures were revealed in March, Circle briefly de-pegged from the dollar before recovering. Its Chief Executive Officer Jeremy Allaire told the Consensus conference in April that the company has strengthened its infrastructure since the incident.
Sequoia, the FDIC and SVB’s parent company declined to comment on the document, Bloomberg reported. Circle did not immediately reply to CoinDesk’s request for comment.
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