silicon valley bank

Circle and BlockFi questioned on banking with SVB by Warren and AOC

Circle and BlockFi executives were questioned after the lawmakers accused Silicon Valley Bank of “coddling” and giving “white glove” treatment to its largest depositors.

Executives at the stablecoin issuer Circle and the bankrupt cryptocurrency lender BlockFi have been questioned by two members of Congress investigating the so-called “mutual backscratching arrangements” alleged to have taken place with the now-failed Silicon Valley Bank.

On April 9, letters from Senator Elizabeth Warren and Representative Alexandria Ocasio-Cortez (AOC) were sent to Circle, BlockFi and 12 other non-crypto tech firms asking a series of questions on each firm’s relationship with SVB.

The lawmakers stated that more needs to be known about SVB’s reported “coddling” and “white glove” treatment towards its largest depositors in order to understand if these firms played a role in SVB’s collapse.

Jeremy Allaire and Zac Prince, the respective chief executives of Circle and BlockFi, were questioned on the length of their financial relationships with SVB and t amounts deposited with the bank, along with what “agreements” were made between their firms.

Senator Elizabeth Warren and Representative Alexandra Ocasio-Cortez’s letter to Circle CEO Jeremy Allaire. Source: U.S. Senate

In addition, the pair wanted to know if SVB offered “perks” such as low-interest rate mortgages or SVB-sponsored “ski trips, conferences and fancy dinners.”

“Congress, bank regulators, and the public are owed an explanation for the bank’s hyper-reliance on tech industry firms and investors,” Warren and AOC wrote.

Related: Polls suggest Elizabeth Warren’s anti-crypto army strategy won’t pay off

They added the extent of SVB’s depositors in the tech industry resulted “in an abnormally high percentage of deposits” not insured by the Federal Deposit Insurance Corporation and questioned the executives on “the role that companies like yours might have played in precipitating the $42 billion single-day-run on SVB.”

“Obtaining information on these factors is important for understanding how SVB failed and how to prevent the next failure,” they added.

Warren and AOC said they believe it may explain why some customers, such as Circle, placed extremely large amounts of uninsured deposits at SVB.

Shortly after SVB collapsed, Circle disclosed that it had $3.3 billion tied up at SVB, while BlockFi was found to have $227 million in uninsured deposits with the bank.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

Breaking: First Citizens snaps up Silicon Valley Bank — Branches open Monday

The deal was announced on March 26 by the Federal Deposit Insurance Corporation.

North Carolina-based First Citizens Bank is set to acquire all deposits and loans of Silicon Valley Bank, according to a statement from the Federal Deposit and Insurance Corporation. 

Under the March 26 purchase and assumption agreement, 17 former branches of Silicon Valley Bank will open as First Citizens Bank and Trust Company on Monday, March 27, and all Silicon Valley Bank depositors will automatically become depositors of First Citizens Bank. 

“Today’s transaction included the purchase of about $72 billion of Silicon Valley Bridge Bank, National Association’s assets at a discount of $16.5 billion,” the FDIC said in a statement.

Approximately $90 billion in securities and other assets will remain in the receivership for disposition by the FDIC. In addition, the FDIC received equity appreciation rights in First Citizens BancShares, Inc. common stock with a potential value of up to $500 million.

The North Carolina-based bank is the 30th largest commercial bank in the United States, with $167 billion in total assets and $119 billion in deposits as of March 10.

Silicon Valley Bank collapsed on March 10 after rumors of a severe liquidity crisis at the bank prompted a bank run. The FDIC was then appointed as the receiver of the failed bank and attempted to auction off the fallen bank. 

The process included two separate auctions for SVB’s assets, one for its traditional deposits unit and the other for its private bank, which was housed within its retail operations and catered to high-net-worth individuals.

Related: ‘How did this happen’ — Powell says Fed stumped over the collapse of SVB

Several firms were understood to have either been planning or had submitted bids for the collapsed U.S. bank.

First Citizens was reported by Bloomberg to have been planning an SVB bid as early as March 18. Three days later, it reportedly submitted a bid for all of SVB. At the time, a First Citizens spokesperson declined to comment on “market rumors or speculation.”

Another regional bank, Valley National Bancorp, is also understood to have submitted a bid for the collapsed bank.

Meanwhile, Reuters reported on March 24 that a third U.S. regional bank, Citizens Financial Group, had been preparing to submit an offer for SVB’s private banking arm.

Magazine: Crypto winter can take a toll on hodlers’ mental health

US explores additional bank support favoring First Republic’s benefit: Report

Despite banking laws stating that remedies should not be aimed at benefiting a specific bank, this change could be structured “in a way to ensure” First Republic benefits, according to unnamed sources.

United States authorities are reportedly deliberating on “expanding” an emergency credit line for banks, which may provide First Republic Bank a time buffer to address balance sheet concerns, according to people familiar with the situation.

In a March 26 Bloomberg report citing unnamed sources, it was reported that U.S. officials are ruminating on what support, “if any,” can be provided to First Republic, however an “expansion of the Federal Reserve’s offering” is one of the options being explored.

First Republic was reportedly deemed “stable enough to operate” by regulators without the need for an “immediate intervention,” as efforts are made by the bank in the meantime to “shore up its balance sheet.”

The sources noted that while the Fed’s liquidity offerings would be reportedly expanded in accordance with banking law, which stipulates that it must be “broadly based” and not aimed at benefiting a specific bank, they also warned that the alteration could be “made in a way” that ensures First Republic Bank benefits.

Related: Let First Republic and Credit Suisse burn

It was reported that despite First Republic facing structural challenges with its balance sheet, “the bank’s deposits are stabilizing” and is not at risk of experiencing “the kind of sudden, severe run” that led regulators to close down Silicon Valley Bank. It noted:

“It has cash to meet client needs while it explores solutions, the people said. That includes $30 billion deposited by the nation’s largest banks this month.”

This comes after the Fed announced a plan on March 19 to strengthen liquidity conditions through “swap lines,” which involve an agreement between two central banks to exchange currencies.

“To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement

The swap line network – which involves the Bank of Canada, Bank of England, Bank of Japan, European Central Bank, and the Swiss International Bank – commenced on March 20 and is set to run until at least April 30.

US explores additional bank support, favoring First Republic: Report

Despite banking laws stating remedies should not be aimed at benefiting a specific bank, this change could be structured “in a way to ensure” that First Republic benefits, according to unnamed sources.

United States authorities are reportedly deliberating on “expanding” an emergency credit line for banks, which may provide First Republic Bank a time buffer to address balance sheet concerns, according to people familiar with the situation.

In a March 26 Bloomberg report citing unnamed sources, it was claimed U.S. officials are pondering what support, “if any,” can be provided to First Republic; however, an “expansion of the Federal Reserve’s offering” is one of the options being explored.

First Republic was reportedly deemed “stable enough to operate” by regulators without the need for an “immediate intervention,” as efforts are made by the bank in the meantime to “shore up its balance sheet.”

The sources reportedly said that while the Fed’s liquidity offerings would be expanded in accordance with banking laws, which stipulate that it must be “broadly based” and not aimed at benefiting a specific bank, they also warned that the alteration could be “made in a way” that ensures First Republic Bank benefits.

Related: Let First Republic and Credit Suisse burn

It was reported that despite First Republic facing structural challenges with its balance sheet, “the bank’s deposits are stabilizing,” and it is not at risk of experiencing “the kind of sudden, severe run” that led regulators to close down Silicon Valley Bank. Sources added:

“It has cash to meet client needs while it explores solutions, the people said. That includes $30 billion deposited by the nation’s largest banks this month.”

This comes after the Fed announced a plan on March 19 to strengthen liquidity conditions through “swap lines,” which involve an agreement between two central banks to exchange currencies.

“To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement

The swap line network, which involves the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and the Swiss International Bank, commenced on March 20 and is set to run until at least April 30.

‘How did this happen’ — Powell says Fed stumped over the collapse of SVB

In a post-FOMC meeting on March 22, the chairman of the Federal Reserve said his “only interest is that we identify what went wrong here.”

United States Federal Reserve Chairman Jerome Powell has conceded that his regulator was blindsided by the sudden collapse of Silicon Valley Bank, despite it being under their watch.

In a press conference held just after the Federal Open Market Committee meeting on March 22, Powell said he immediately knew there was a need for an internal investigation when the bank shut down on March 10, stating:

“I realized right away that there was going to be a need for a review. I mean, the question we were all asking ourselves over that first weekend was, ‘how did this happen?’”

The Federal Reserve on March 13 announced the launch of an internal investigation led by Vice Chairman Michael Barr to look into the events surrounding the failure of SVB and how the Fed “supervised and regulated” the bank.

Powell confirmed that Barr will be testifying next week.

“We’re doing the review of supervision and regulation,” Powell said. “My only interest is that we identify what went wrong here,” he added.

Federal Reserve Chairman Jerome Powell speaking at a Federal Open Market Committee conference on March 22. Source: Federal Reserve

SVB’s collapse has been linked to the Federal Reserve’s successive interest rate hikes that have been aimed at taming inflation. This is understood to have eroded SVB’s long-term bonds it purchased at near-zero rates.

When SVB announced that it suffered a $1.8 billion after-tax loss and was looking to raise $2.25 billion, the market panicked, leading to a $160 billion wipeout in its market cap in 24 hours.

The share price of SVB Financial Group fell nearly 60% on March 10. Source: Yahoo Finance

At the time, despite SVB CEO Greg Becker urging investors to “stay calm” and not to “panic”, depositors began to request withdrawals from SVB en masse, causing a bank run.

On March 10, the United States Federal Deposit Insurance Commission stepped in, taking possession of SVB to help depositors get access to their money. Emergency measures were put in place by the government soon after to guarantee all deposits at SVB.

Related: Fed starts ‘stealth QE’ — 5 things to know in Bitcoin this week

Powell’s latest comments on SVB come as the Federal Reserve Board announced that it will increase interest rates by 25 basis points.

The news has U.S. Senator Elizabeth Warren frustrated with Powell, who has now raised interest rates nine consecutive times to 5%.

“I think he’s a dangerous man to have in this job,” she said, in a March 22 interview on CNN.

“We’ve never seen hikes at this rate in the modern economy,” she said, adding that it risks “pushing our economy into a recession.”

Warren believes the effects of Powell’s “weak” regulatory approach toward large banks in the U.S. over the last five years is another factor to blame for the recent banking crisis:

“I predicted five years ago the consequence of that kind of weakening would be that we see these banks load up on risk, build their short term profits, give themselves ginormous bonuses and big salaries and then some of those banks would explode.”

“That is exactly what has happened on Jerome Powell’s watch,” Warren added.

Related: Unstablecoins: Depegging, bank runs and other risks loom

Bank collapses are spurring interest in self-custody startups

The implosions of Signature Bank and Silicon Valley Bank are giving self-custody startups an opportunity to prosper.

The collapses of Signature Bank and Silicon Valley Bank have left many people in disbelief, with skeptics questioning the stability of the traditional financial system. 

Cryptocurrency, sadly, did not do much to capitalize on that skepticism, considering Bitcoin (BTC) tanked at the first sign of trouble for USD Coin (USDC), which briefly lost its peg to the dollar.

Still, the crisis also provided a golden opportunity for the crypto industry to demonstrate its resilience and offer viable alternatives. As faith in the traditional banking system wanes due to SVB causing “a crisis in confidence,” venture capital (VC) firms and startups are increasingly embracing self-custody solutions for digital assets, ensuring that individuals maintain full control over their funds.

The shift toward self-custody and decentralized finance (DeFi) systems is indicative of a larger trend that sees more people embracing cryptocurrencies and the principles of financial sovereignty. This increased interest in decentralized solutions is fueling innovation and investment in the space, which is ultimately good for both the crypto ecosystem and the broader financial landscape.

Related: Let First Republic and Credit Suisse burn

Some readers may find the notion of celebrating a bank’s collapse objectionable, arguing that it undermines the credibility and importance of established financial institutions. Additionally, others may argue that the promotion of cryptocurrencies and self-custody can be viewed as opportunistic, capitalizing on a crisis to advance a particular agenda.

The current financial landscape is undergoing a major transformation, with many people expressing distrust in traditional financial institutions. A recent survey revealed that 85% of “US institutions account for 85% of Bitcoin buying.” This preference for digital assets is not only evident among institutional investors but also among retail investors. A 2022 survey by the Economist found that 85% of investors “agree there is a need for open-source digital currencies as a diversifier in a portfolio or treasury account.”

The growth of Bitcoin and other cryptocurrencies has been accompanied by the rise of DeFi, which offers users decentralized financial services such as lending, borrowing and asset management. DeFi protocols have attracted billions of dollars in investments, providing people with financial services that are free from the constraints of traditional banks. The bank collapse has only served to highlight the merits of these decentralized systems, which offer users more control over their funds and greater transparency.

As a response to the growing demand for decentralized financial solutions, VC firms are increasingly investing in startups focused on self-custody and DeFi — e.g., more decentralized infrastructure. Such investments demonstrate the commitment of VC firms to support innovation in this burgeoning field.

The shift toward self-custody solutions also has the potential to transform the way people manage their digital assets. By offering individuals full control over their cryptocurrencies, self-custody wallets eliminate the need for intermediaries and empower users to take responsibility for their own funds. This could lead to the emergence of new business models and decentralized applications that cater to the needs of an increasingly digital-savvy population.

Bank collapses present a challenge, but they also serve as an important catalyst for change. This crisis has prompted people to reconsider their reliance on traditional financial institutions and explore alternative solutions, such as cryptocurrencies and self-custody. By embracing these emerging technologies, VC firms and startups are not only helping to shape the future of finance but also creating a more resilient and inclusive financial system for all.

Related: Collapse of Silvergate and Silicon Valley Bank represents a challenge for crypto

With an influx of capital and innovation in the crypto space, it is evident that the bank collapse has inadvertently bolstered the growth and adoption of cryptocurrencies. As more people embrace self-custody solutions and decentralized financial services, the stage is set for a new era of financial sovereignty that challenges the status quo and redefines our understanding of money.

By investing in self-custody startups and decentralized financial services, crypto users can increase the security and visibility of their digital assets. This makes it less likely that Bitcoin will collapse when another bank fails or if another black swan event occurs, such as another huge bank run.

Jan Strandberg is the CEO of Acquire.Fi. His tenure in the crypto industry goes back to Paxful, where he served as chief growth officer. He also served as the chief growth officer and co-founder of the Yield App.

This will inevitably create a more resilient financial system, one that is secure and inclusive for all, one where you don’t have to worry about losing your money overnight, but instead, you will be able to store your money in a secure digital vault just like a bank.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph

Fed, central banks enhance ‘swap lines’ to combat banking crisis

Currency swap lines have been used during times of crisis in the past, such as the 2008 global financial crisis and the 2020 coronavirus pandemic.

The United States Federal Reserve has announced a coordinated effort with five other central banks aimed at keeping the U.S. dollar flowing amid a series of banking blowups in the U.S. and in Europe.

The March 19 announcement from the Fed comes only a few hours after Swiss-based bank Credit Suisse was bought out by UBS for $3.25 billion as part of an emergency plan led by Swiss authorities to preserve the country’s financial stability.

According to the Federal Reserve Board, a plan to shore up liquidity conditions will be carried out through “swap lines” — an agreement between two central banks to exchange currencies.

Swap lines previously served as an emergency-like action for the Federal Reserve in the 2007-2008 global financial crisis and the 2020 response to the COVID-19 pandemic. Federal Reserve-initiated swap lines are designed to improve liquidity in dollar funding markets during tough economic conditions.

“To improve the swap lines’ effectiveness in providing U.S. dollar funding, the central banks currently offering U.S. dollar operations have agreed to increase the frequency of seven-day maturity operations from weekly to daily,” the Fed said in a statement.

The swap line network will include the Bank of Canada, Bank of England, Bank of Japan, European Central Bank and the Swiss National Bank. It will start on March 20 and continue at least until April 30.

The move also comes amid a negative outlook for the U.S. banking system, with Silvergate Bank and Silicon Valley Bank collapsing and the New York District of Financial Services taking over Signature Bank.

The Federal Reserve, however, made no direct reference to the recent banking crisis in its statement. Instead, it explained that they implemented the swap line agreement to strengthen the supply of credit to households and businesses:

“The network of swap lines among these central banks is a set of available standing facilities and serve as an important liquidity backstop to ease strains in global funding markets, thereby helping to mitigate the effects of such strains on the supply of credit to households and businesses.”

The latest announcement from the Fed has sparked a debate about whether the arrangement constitutes quantitative easing.

U.S. economist Danielle DiMartino Booth argued that the arrangements are unrelated to quantitative easing or inflation and that it does not “loosen” financial conditions:

The Federal Reserve has been working to prevent an escalation of the banking crisis.

Related: Banking crisis: What does it mean for crypto?

Last week, the Federal Reserve set up a $25 billion funding program to ensure banks have sufficient liquidity to cover customer needs amid tough market conditions.

A recent analysis by several economists on the SVB collapse found that up to 186 U.S. banks are at risk of insolvency:

“Even if only half of uninsured depositors decide to withdraw, almost 190 banks are at a potential risk of impairment to insured depositors, with potentially $300 billion of insured deposits at risk.”

Cointelegraph reached out to the Federal Reserve for comment but did not receive an immediate response.

SVB’s UK arm issues 15M pounds in bonuses after symbolic bailout: Report

Insider sources reportedly described the bonus pool as “modest,” adding that the stock held by senior execs had been “rendered worthless” following Silicon Valley Bank UK arm’s “near-collapse.”

Silicon Valley Bank UK (SVB UK) has granted millions of pounds in employee bonuses, just days after it was rescued by global banking giant HSBC for just 1 British pound, according to unnamed sources.

In a March 18 Sky News report citing unnamed sources, it was reported that payouts to SVB UK staff and senior executives were signed off “earlier this week” by HSBC UK Bank — the institution which acquired SVB UK for 1 British pound ($1.22) on March 13.

It was reportedly “unclear” how much had been awarded to SVB UK’s CEO, Erin Platts, “or her senior colleagues,” however, the sources described the bonus pool as “modest” and said that it totaled “between £15m and £20m” (approximately $18.26 million and $24.35 million).

While the insiders reportedly noted that if SVB UK had “not been acquired solvently,” the bonuses wouldn’t have “been paid this week.” One insider reportedly “pointed out” that the stock held by senior executives and other employees had been “rendered worthless” by SVB UK’s near-collapse.

Related: Failed tech bank SVB held over $5B for prominent crypto VCs: Report

Another insider reportedly added that the bonus payments were “a signal of HSBC’s confidence in the talent base” at SVB UK and were to honor “previous agreed payments” in an effort to “retain key staff.”

SVB UK previously stated in a March 17 tweet that it was “delighted” to now be part of HSBC after 14 years of supporting and “growing the UK’s innovative economy.“

This comes after the Bank of England (BoE) shut down the operations of SVB UK on March 10, stating that it had a “limited presence” and no “critical functions” supporting the financial system.

The statement declared that SVB UK would “stop making payments or accepting deposits,” as the BoE intended to apply to the court to place SVB into a “bank insolvency procedure.”

Meanwhile, SVB’s United States banking arm has been taken into government ownership. Its holding company, SVB Financial Group, filed for Chapter 11 bankruptcy protection on March 17 as it seeks buyers for its other assets.

SVB Group’s chief restructuring officer, William Kosturos, stated that the Chapter 11 process will allow SVB Financial Group to “preserve value as it evaluates strategic alternatives for its prized businesses and assets.”

Kosturos emphasized that SVB Capital and SVB Securities will continue to operate, led by their respective independent teams.

Did regulators intentionally cause a run on banks?

Silicon Valley Bank and Silvergate Bank were crucial to many in the cryptocurrency industry, and it’s fueling theories that regulators encouraged their downfall.

Global economic conditions are tightening; interest rates are in flux; and inflation has yet to be curbed. Considering the economic headwinds, the fact that Silvergate Bank, Silicon Valley Bank and other banks are breaking is not surprising. 

But why now? Quickly rising interest rates are extremely disruptive to banking models, but the collapse of these particular banks has raised eyebrows. It just so happens that these banks are important to the crypto industry.

Selective enforcement in service of an agenda

Government agencies often use the selective enforcement of convoluted or unclear rules and regulations to pursue agendas. They can then defend the action by saying that the public’s interest was at stake.

Here’s the analogy: An apartment building needs to be removed for an upcoming freeway expansion project. The choices are to either execute eminent domain, a scenario where the government has the ability to overrule all leases and ownership and take control of the property. This would not be a popular decision with the community. There is another option. The local government could simply not enforce pre-existing regulations around maintenance and upkeep, thus letting the property slip into disrepair.

A government inspector shows up. The property needs major updates or it will have to be condemned. The property owner cannot afford to get the property up to code. And the inhabitants must move and be relocated for their own safety.

This is the way the government works.

The government sets up broad rules and regulations — selectively enforces them — and creates a situation where the outcome they need is achieved. They skirt direct accountability and public ire but achieve the action needed.

Market conditions are the set-up

As market conditions begin to tighten, businesses that are discretionary and speculative suffer first — e.g., businesses such as startups, restaurants and hedge funds. Thus, banks in the tech and crypto sectors become weakened first. Most banks focus on serving specific industries. If a bank’s customers are failing, the bank is in a precarious position.

If a bank is publicly listed, once public investors understand the predicament, the results are catastrophic. SVB tried to raise additional capital via public markets to bail themselves out, but markets caught wind and went short. Depositors fled to “safer” banks. A classic bank run ensued. The market, in effect, prepped the bank for regulatory intervention.

Regulators take full advantage

The failure of Silvergate and SVB and the takeover of Signature have arguably signaled the start of a regulatory effort to actively cull crypto banks. If crypto can be surgically separated from traditional banking, this solves many perceived problems for regulators. Once crypto on-ramps are eliminated, the category can be aggressively regulated without the perception from the public that an investment opportunity is being taken away.

However, this is not a conspiratorial plan. Rather, the regulators are taking advantage of balance sheet weakness and poor banking practices to set up scenarios where it then seems logical that they should intervene. There was no bank run at Signature. Regulators took the advantage of a chaotic situation to pursue an agenda.

Startups, especially crypto startups, are by their very nature speculative. Blockchain at scale is an “unknown quantity” of speculation due to a lack of regulation. Recall the analogy above. The lack of oversight and regulatory direction has led financial institutions that serve tech and crypto companies to push the boundaries.

Because of macro market conditions, that type of experimentation has created a situation that puts these banks on the edge of solvency. As regulators step in to “save the day,” they get a two-for-one deal. They are perceived to have the public’s interest in mind as they eliminate critical functionality for the crypto industry.

Contagion is a meme

No bank can survive a bank run. Fractional banking has led to a system where banks simply do not have the assets to entirely cover customer deposits. If investors begin to question the stability of a bank and start to withdraw deposits, that bank will either fail or need to be bailed out. Contagion is a meme that, like other memes, is built on a deep, potentially uncomfortable truth. Banks are not as stable as the public is led to believe.

Related: Why isn’t the Federal Reserve requiring banks to hold depositors’ cash?

Nic Carter calls this recent regulatory focus on crypto banks “Operation Chokepoint.” However, bank failures accelerated by regulatory targeting destabilize the perceived stability of the entire financial system. We see this as runs on institutions like First Republic — a traditional medium-sized bank — play out. More runs are coming.

Market forces opened the door for regulators to aggressively cull crypto banks through controlled demolition. But the demolition has focused investors on existing deep systemic risks. The controlled demolition might serve the immediate agenda, but contagion is on the brink.

Joseph Bradley is the head of business development at Heirloom, a software-as-a-service startup. He started in the cryptocurrency industry in 2014 as an independent researcher before going to work at Gem (which was later acquired by Blockdaemon) and subsequently moving to the hedge fund industry. He received his master’s degree from the University of Southern California with a focus on portfolio construction and alternative asset management.

This article is for general information purposes and is not intended to be and should not be taken as legal or investment advice. The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

SVB collapse chilled NFT trading volumes: DappRadar

Just 11,440 NFT traders were active on March 11, which was the lowest figure recorded since November 2021.

Nonfungible token trading volumes took a massive beating following the collapse of Silicon Valley Bank last week as traders fled the markets, fearing the repercussions of a major United States bank going under.

According to a March 16 report from data aggregation platform DappRadar, NFT trading volumes were hovering between $68 million to $74 million in the lead-up to SVB’s collapse on March 10, then fell to $36 million on March 12.

The dip was accompanied by a 27.9% drop in daily NFT sales count between March 9 to March 11.

NFT trading volume and sales count on all networks between March 1-13. Source: DappRadar

Just 11,440 NFT traders were “active”  on March 11, the lowest figure recorded since November 2021, according to DappRadar.

The report said that the depeg of USD Coin (USDC) — which dropped as low as $0.88 — moved trader attention away from the NFT market:

As a result, “NFT traders became less active,” Dappradar explained.

Despite the trading chills the market value of “blue chip” NFTs was not materially impacted, with the floor prices of collections such as the Bored Apes Yacht Club (BAYC) and CryptoPunks only slightly falling.

The floor price of BAYC NFTs fell 2%, from 68.4 ETH to 67 ETH, since the SVB collapse. Source: OpenSea

“The recovery was quick, showing the resilience of these top-tier NFTs,” DappRadar said. “Blue-Chip NFTs remain a steady investment in a disrupted market.”

The steady floor prices of the BAYC and CryptoPunks may be attributed to the team behind the collections, Yuga Labs, confirming it only had a “super limited exposure” to SVB, according to co-founder Greg Solano.

Related: 74% of survey participants say they buy NFTs for status

However, the floor price of the Moonbirds collection fell a significant 35.3% from 6.18 Ether (ETH) to 4 ETH on OpenSea, following the news that PROOF — the team behind the NFTs — had considerable exposure to SVB.

The floor price of Moonbird since the SVB collapse. Source: OpenSea

This was partially triggered by one Ethereum address selling almost 500 Moonbirds NFTs for losses ranging between 9% to 33%, DappRadar said.

The sell-offs on the NFT marketplace Blur totaled a loss of 700 Ether.