FDIC Releases Statement on USDC Distributor Circle: Will Funds Be Recovered?

US Federal Deposit Insurance Corporation (FDIC), cryptocurrency made a statement about the situation of the US bank Silicon Valley Bank, where the reserves of his company Circle are also stuck.

FDIC to Advance Payments to Uninsured SVB Customers Including Circle

The FDIC announced that it will pay uninsured depositors at Silicon Valley Bank a certain percentage of their deposits as “advance dividends.”

U.S. customers of Silicon Valley Bank, who are not covered by a government-sponsored insurance program, compete with each other to sell their deposits to pay their salaries and other operating expenses after the bank is shut down by regulators.

The SVB will reopen Monday for depositors insured under the newly formed Santa Clara Deposit Insurance National Bank, but it is not yet clear whether or when customers with more than $250,000 in their accounts will have access to all of their money.

Some try to sell at big discounts to get cash. According to the Cherokee Acquisition, a claims trading platform in bankruptcy cases, on Friday, uninsured SVB deposits were selling for between 55 and 65 cents per dollar. Other deposits were offered at a price of between 70 and 75 cents per dollar, according to a knowledgeable person.

Within 24 hours of the bank’s collapse, founders began receiving nasty emails from investors offering to buy their deposits, according to messages seen by the Financial Times.

According to an industry source, standard banking services, including check and money order services, will be available when the bank reopens under FDIC control.

Customer deposits may also be released if the SVB is sold to another bank.

*Not investment advice.

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