In the largest failure of a US bank since 2008, US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits.
The moves came as the firm, a major technology lender, was scrambling to raise funds to cover a loss from the sale of assets impacted by higher interest rates.
Its problems prompted a rush of customer withdrawals and raised concerns about the banking sector’s health.
Officials said they acted to “protect insured depositors”.
Silicon Valley Bank had “inadequate liquidity and insolvency,” according to banking regulators in California, where the company is headquartered.
The Federal Deposit Insurance Corporation (FDIC), which typically insures deposits up to $250,000, said it had taken charge of the bank’s roughly $175 billion (£145 billion) in deposits, the 16th largest in the US.
Bank offices would reopen, and clients with insured deposits would be able to access funds “no later than Monday morning,” it said, adding that proceeds from the sale of the bank’s assets would be distributed to uninsured depositors.
With many of the firm’s customers in this situation, many businesses with money in the bank are concerned about their future.
“I’m on my way to the branch right now to get my money. I attempted to transfer it out yesterday, but it did not work. You know those times when you think you’re screwed but aren’t sure? This is one of those instances “According to one founder of a start-up, the BBC.
Another healthcare startup founder stated: “We just hit a million dollars in our bank account three days ago… Then something like this happens.”