Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez are questioning some of the largest depositors of the now-fallen Silicon Valley Bank (SVB), including USDT issuer Circle and bankrupt BlockFi. The lawmakers are seeking information about the companies’ relationship with SVB.
The lawmakers sent letters to Circle, BlockFi, and 12 other non-crypto companies, questioning why they chose to bank with SVB. Warren and Ocasio-Cortez asked Circle and BlockFi CEOs, Jeremy Allaire and Zac Prince, respectively, about the financial relationship they had with SVB, the nature of the agreement made with the bank to maintain deposits at the financial institution, and the type of relationship that executives of the above companies had with the lender.
The letters further stated the bank’s reported coddling and white glove treatment of its largest depositors and also referenced reports of “lower-interest rate mortgages”, sponsorship of ski trips and fancy dinners offered by SVB to tech companies, which supposedly caused some customers to make large amounts of uninsured deposits at the financial institution.
Circle revealed that the company had $3.3 billion of its total USDC reserves at the collapsed SVB. BlockFi also had $227 million in the bank, which surpassed the Federal Deposit Insurance Corporation (FDIC) threshold of $250,000. Meanwhile, all 14 companies have until April 24, 2023, to respond to the questions