US cryptocurrency firm Circle announced that it has an exposure of $3.3 billion of its $40 billion of USD Coin reserves at Silicon Valley Bank (SVB), which recently collapsed. SVB’s collapse is the largest bank failure since the 2008 financial crisis and has caused a great deal of concern for traders who fear potential contagion in the financial sector. This is especially true for the crypto sector, as crypto-focused bank Silvergate also disclosed plans to wind down operations and voluntarily liquidate this week.
In response to the SVB collapse, several crypto companies took to Twitter to deny any exposure to the failed lender. The chief executive of cryptocurrency exchange Binance, for instance, said in a tweet that the company had no exposure, as did Tether CEO Paolo Ardoino. Stablecoin issuer Paxos and crypto exchange Gemini similarly tweeted that they do not have any relationships with SVB.
Boston-based Circle, which had previously moved a “small percentage” of USDC reserve deposits held at Silvergate to its other banking partners, said in another tweet on Friday that it and USDC continue to operate normally while it waits to see how SVB’s receivership will affect its depositors. The company noted that it is committed to ensuring the stability of the USDC, which is one of the largest stablecoins in circulation.
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