Prominent blockchain venture capitalists (VCs) held assets worth more than $6 billion in the now-defunct financial entity, according to a report that began circulating on March 11 following the collapse of Silicon Valley Bank (SVB). That includes $2.85 billion from Andreessen Horowitz (a16z), $1.72 billion from Paradigm and $560 million from Pantera Capital.
A16z currently holds active investments in projects such as Alchemy, Sky Mavis, and Yuga Labs, and was previously an investor in cryptocurrency exchange Coinbase. Paradigm has invested in projects like Compound, Cosmos, and Uniswap. Meanwhile, Pantera Capital holds stakes in projects such as 1inch, Ankr, and Zcash.
The report, prepared by Castle Hall Due Diligence and extracted from SEC filings, is a point-in-time disclosure of venture capital assets in custody at SVB. It does not include updates such as the latest withdrawals, deposits or transfers made after the time of disclosure. Additionally, while the aforementioned companies are significant investors in the crypto space, not all assets held by SVB are invested in crypto.
SVB, a key financial institution serving venture capital firms and technology companies, was shut down by California regulators on March 10. At the time, it was the 16th largest bank in the United States, with assets of more than $212 billion. Apparently, the cause of the collapse was leveraged bets on U.S. Treasuries that failed after the Federal Reserve raised interest rates multiple times last year, resulting in a $1.8 billion loss on its $21 billion portfolio — sharply depressing bond prices.
Although the losses were relatively small, a crisis of confidence ensued, leading to tens of billions of dollars in redemption demands within days. The company reportedly has $74 billion left in long-term U.S. Treasury bonds that have yet to be liquidated to meet redemptions. Circle, the issuer of the popular USD Coin (USDC) stablecoin, currently has $3.3 billion worth of deposits in SVB.
