Following the collapse of Silicon Valley Bank, the Federal Deposit Insurance Corporation's (FDIC) decision to guarantee all accounts exceeding the federal deposit insurance limit of $250,000 not only safeguarded thousands of small tech start-ups but also rescued big companies that were hardly affected by the crisis. This includes Sequoia Capital, which held $1 billion at the bank, and KanZhun Ltd., the parent company of job search platforms Boss Zhipin and Kanzhun, with more than $900 million in the bank.
Since the bank's failure, the FDIC has maintained confidentiality around the list of large corporations involved. However, this list was erroneously sent to the media by the FDIC. Even after the FDIC noticed its mistake and requested the media not to publish the list due to its confidential commercial or financial information, the media that received the list decided to disclose it.
Ironically, the U.S. government characterized the FDIC's decision to guarantee all deposits as a measure to "protect American workers and small businesses, and ensure the security of our financial system." U.S. Treasury Secretary Janet Yellen believes government measures, including supporting all depositors, are necessary, given that American families rely on banks for housing finance, educational investment, and other life improvement purposes, while businesses borrow from these institutions to start new companies and expand existing ones.
However, a significant amount of taxpayer money flowed to large corporations who arguably didn't need the government's protection.
As revealed by media on Friday, June 23, the following are the main tech titans that received FDIC protection:
1. Sequoia Capital: Known for backing renowned tech companies like Apple, Google, and WhatsApp, the $1 billion that Sequoia Capital had in Silicon Valley Bank was just a small portion of its $85 billion in managed assets.
2. KanZhun Ltd.: The Chinese recruitment giant had $902.9 million deposited at Silicon Valley Bank. Before its U.S. IPO in 2021, the company received significant support from Tencent and was one of the largest Chinese IPOs on the U.S. stock market that year.
3. Altos Labs: The life sciences start-up, which focuses on cell regeneration, had $680.3 million deposited at Silicon Valley Bank. The privately held company has raised $3.27 billion from billionaires including Amazon founder Jeff Bezos, as well as Mubadala Investment Company and other investors.
4. Marqeta Inc.: The payment start-up had $634.5 million at Silicon Valley Bank. While Marqeta acknowledged having "significant deposits" at the bank, it has already started moving its funds to other banks.
5. IntraFi Network: The company, which provides deposit services to financial institutions, had $410.9 million at Silicon Valley Bank. However, the company stated that it did not have any of its own funds in the bank and was not a customer.
6. Circle Internet Financial Ltd.: The crypto stablecoin company had previously disclosed its deposits at Silicon Valley Bank, which accounted for 8.2% of its dollar reserves. According to FDIC data, the company had as much as $3.34 billion in the bank.
7. Roku Inc.: The streaming device manufacturer had approximately 26% of its cash and cash equivalents at Silicon Valley Bank, totaling about $420 million according to FDIC data.
8. Bill.com: The fintech company had around $670 million at Silicon Valley Bank, which included about $300 million in deposits and $370 million belonging to its customers. FDIC records listed Bill.com's deposit at Silicon Valley Bank as $761.1 million.
9. SVB Financial Group: Silicon Valley Bank and its parent company, SVB Financial Group, had $4.6 billion in accounts at Silicon Valley Bank. In its bankruptcy case, SVB Financial Group argued that at least $2 billion of its deposits at the bank should be returned. Federal regulators said SVB Financial Group must apply to the bank's receiver for the money.
