Ripple CEO Brad Garlinghouse remarked on its company’s exposure to the collapsed Silicon Valley Bank (SVB) on March 12, maintaining that, the development will not disrupt daily operations.
Setting the record straight on SVB Qs:
Ripple had some exposure to SVB – it was a banking partner, and held some of our cash balance. Fortunately, we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.
— Brad Garlinghouse (@bgarlinghouse) March 12, 2023
While Garlinghouse did not disclose details of what led to the indiscriminate collapse of SVB, he maintained that more details will be unveiled in the meantime.
He further stated that Ripple remains in a stable financial position as there was no reason to panic. Although the SVB collapse had severely affected the crypto market in the past days, Ripple’s XRP continues to hold its ground at $0.36 as per CoinMarketCap data.
Earlier on March 11, Ripple Chief Technology Officer (CTO) David Schwartz vouched that the company would release a statement on its Ripple exposure in order to douse tension on the SVB crisis.
Ripple will issue a statement shortly. I can't say anything until they do.
— David "JoelKatz" Schwartz (@JoelKatz) March 12, 2023
In light of the foregoing, some users within the crypto community swiftly replied to Garlinghouse’s comment, stating that they do not doubt that Ripple has proper risk management in place.
I never doubted you or @Ripple to have taken proper risk management. 💯😎 Thank you for the statement.
— EarthAngel.XRP☀️ (@EarthAngel_Xrp) March 12, 2023
It appears that the SVB collapse marks the beginning of a crisis in the U.S. banking sector as the New York-based Signature bank was also shut down by state regulators on March 12, and taken over by the NY Department of Financial Services (NYDFS).
Coinbase, Celsius, and Paxos Trapped in Signature Bank
Following the recent development, crypto exchange Coinbase, crypto lender Celsius and stablecoin issuer Paxos reportedly have funds locked in the just-shuttered Signature Bank.
Meanwhile, Coinbase reacted on March 13 via a tweet that client cash at the bank continues to be protected by FDIC pass-through insurance. It explicitly stated that Coinbase had an approximately $240 million balance in corporate cash at Signature as of Friday, March 10.
As of close of business Friday March 10 Coinbase had an approximately $240m balance in corporate cash at Signature. As stated by the FDIC, we expect to fully recover these funds. https://t.co/XY5L7m4RMs
— Coinbase (@coinbase) March 12, 2023
Paxos also immediately spoke up on March 13, stating that it currently holds $250 million at the signature bank and holds private deposit insurance well in excess of cash balance and FDIC per-account limits.
In the same vein, crypto lender Celsius also gave a word of assurance on March 13 that all deposits are insured and will be repaid in whole.
There is no mincing word that these are trying times for traditional banks and crypto firms affiliated with these top-giant banks. It is hoped that the crypto industry will survive this ordeal as usual.