First Citizens BancShares, the parent company of First Citizens Bank, has made a significant move in the world of banking by agreeing to acquire Silicon Valley Bank (SVB).
The Federal Deposit Insurance Corporation (FDIC) confirmed the deal in a statement on Monday, as reported by Bloomberg.
With a number of key crypto companies relying on SVB prior to its downfall, what impact will the acquisition by First Citizens BancShares have on the future of the crypto industry?
First Citizens Acquisition Of SVB: Details
After SVB experienced a run on deposits, leading to insolvency, the FDIC took control of the bank weeks ago. As part of the deal, First Citizens BancShares has agreed to purchase approximately $72 billion in assets from Silicon Valley Bank at a discounted price of $16.5 billion.
The FDIC will retain control of roughly $90 billion in securities and other assets of the California-based bank.
The FDIC will also receive equity appreciation rights in First Citizens BancShares, which could potentially be worth up to $500 million. The 17 former branches of Silicon Valley Bank will now operate as First Citizens Bank.
The failure of Silicon Valley Bank is expected to result in a loss of around $20 billion to the Deposit Insurance Fund, according to the regulator.
What This Move Means For Crypto
With the acquisition of SVB by First Citizens BancShares, there are concerns about how this move will impact the crypto market.
SVB has played a crucial role in providing banking services to some of the biggest crypto companies in the world, including Circle Financial.
Following Circle’s announcement that $3.3 billion of its deposits were being held at SVB, the value of its USDC stablecoin dropped below its $1 peg for a brief period.
The acquisition raises questions about whether the bank’s crypto services will continue, and if so, how they may change under new ownership.
While First Citizens BancShares has not publicly commented on the matter, industry experts believe that the acquisition may lead to some changes in the bank’s approach to serving the crypto industry.