Garlinghouse noted that financial systems are broken given their high susceptibility to rumors as evidenced by the current banking crisis.
In a March 12 Twitter thread to his 700,000 followers, Ripple CEO Brad Garlinghouse addressed his company’s exposure to the collapsed Silicon Valley Bank (SVB), emphasizing the company’s financial stability. The exec noted that while Ripple had exposure to SVB as a banking partner, “we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.”
Setting the record straight on SVB Qs:
Ripple had some exposure to SVB – it was a banking partner, and held some of our cash balance. Fortunately, we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.
— Brad Garlinghouse (@bgarlinghouse) March 12, 2023
Garlinghouse assured investors that Ripple’s day-to-day operations would remain unaffected as the majority of the firm’s funds were held with other banking partners. He also noted that now financial systems are broken given their high susceptibility to rumors as evidenced by the current banking crisis.
The tweet drew mixed responses from the community, with some expressing gratitude for the update and others expressing concern about the funds Ripple had held with the collapsed bank.
The tweet comes after assurance from Ripple chief technology officer David Schwartz on March 11 that the firm would release a statement on the matter. It is unclear if this had been in reference to the tweet from Garlinghouse. The CEO did not reveal how much money had been stuck in SVB.
SVB, the biggest bank for tech startups, collapsed on Friday, March 10 as a result of withdrawals amounting to at least $42 billion. This was seemingly triggered by a Wednesday statement by the bank revealing that was looking to raise $2.5 billion to shore up its balance sheet. Another crypto-friendly bank, New York-based Signature Bank, was shut down on Sunday by the United States Treasury, Federal Reserve, and FDIC citing systemic risk.
The FDIC has taken over control of SVB’s remaining assets. Regulators are reportedly considering measures to prevent the bank failure – the second-largest in US history after the 2008 global financial downturn – from escalating further.
Meanwhile, the Federal Reserve announced that it had put in place a $25 billion fund to assist banks with liquidity in times of financial stress. It added that all Silicon Valley Bank depositors would have access to all their funds starting Monday, March 13 stating that “no losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer.” Equity and bondholders at SVB and Signature Bank are, however, being wiped, according to a senior Treasury official.
Mercy Mutanya is a Tech enthusiast, Digital Marketer, Writer and IT Business Management Student.
She enjoys reading, writing, doing crosswords and binge-watching her favourite TV series.
