In an inadvertent disclosure, the FDIC unintentionally provided Bloomberg News with information regarding the prominent clients of Silicon Valley Bank, which faced a bank failure and was subsequently rescued through emergency actions by regulators. Bloomberg News obtained an unredacted FDIC document, which was mistakenly released in response to a Freedom of Information Act request, shedding new light on the beneficiaries of the controversial rescue in March. Silicon Valley Bank’s collapse marked the second-largest bank failure in US history.
Following the sudden demise of Silicon Valley Bank, the FDIC and other federal regulators made the decision to fully compensate all of the bank’s customers, even those exceeding the standard insurance limit of $250,000.
This emergency measure not only protected fledgling tech startups from potential devastation caused by the bank’s collapse but also benefited prominent players in the tech industry.
For instance, according to the FDIC document, leading venture capital firm Sequoia Capital held slightly over $1 billion at Silicon Valley Bank, making it the fourth-largest depositor. Sequoia Capital, renowned for its insightful investments in companies like PayPal, Google, and Apple, did not provide a comment in response to the situation.
One notable customer of Silicon Valley Bank was Kanzhun, a Beijing-based technology firm that operates BOSS Zhipin, China’s largest online recruitment platform. As per the FDIC document, Kanzhun held approximately $903 million at Silicon Valley Bank. It appears that the FDIC, responsible for safeguarding bank deposits, did not intend to disclose the information regarding Silicon Valley Bank’s major clients.
According to Bloomberg, the FDIC requested the media outlet to refrain from sharing the list of depositors and to destroy it, citing the intention to “partially” withhold certain details from the document due to their inclusion of confidential commercial or financial information.
