After experiencing both the 2nd and 3rd largest US bank failures in history, the President of the United States, Joe Biden will hold an emergency announcement tomorrow morning (Washington Time) to address the current US banking crisis.

As per Reuters, the news comes after the US government announced that it is taking actions to shore up deposits in the country and stem any broader financial fallout from the sudden collapse of both Silicon Valley Bank and Signature Bank.

The past 3 days saw 2 of the largest US bank failures in history – Silicon Valley Bank and Signature Bank. Signature Bank (SBNY) ranks 3rd in the list of largest US bank failures in history with $118 billion USD in assets at the time of failure in 2023, Silicon Valley Bank (SVB) ranks 2nd with $209 billion in assets in 2023, and Washington Mutual ranks 1st with $307 billion in assets in 2008.

The White House has issued a press statement stating that over the weekend, the US government has been working diligently with the country’s banking regulators to address problems at Silicon Valley Bank and Signature Bank. And a prompt solution of providing all depositors at these banks back their deposits, both insured and uninsured, will commence on Monday. It was mentioned that the solution also ensures that US taxpayer dollars are not put at risk.

And with all the concerns and complaints of the crisis ongoing, Joe Biden stated that he is “firmly committed to holding those responsible for this mess fully accountable and to continuing our efforts to strengthen oversight and regulation of larger banks so that we are not in this position again.”

On a closing note, the US President will deliver remarks on how the country will maintain a resilient banking system to protect its historic economic recovery tomorrow morning.

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(Source, Source 2, Via)

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USA financial authorities were busy behind the scenes for the weekend, as it was announced today that New York regulators have shut down Signature Bank (SBNY) in the country. 118 billion USD of the bank’s assets was seized by the country’s Federal Deposit Insurance Corporation (FDIC) this morning, making it the third largest bank failure in US history, right behind the Silicon Valley Bank and Washington Mutual bank failure.

In a joint statement by the US Treasury, Federal Reserve, and FDIC, New York-based Signature Bank was closed due to systemic risks in the current economic climate. The bank is the 3rd US bank to be shut down this week, after the Silvergate and Silicon Valley Bank (SVB) collapse. 

Investors and the general US public sentiment on the bank shut downs this week are very concerning, as Etsy sellers were receiving notices of delay of their payments, and US companies such as Roku and Silicon Valley tech startups were concerned about employee payrolls due to the unavailability of cash due to the collapse of the banks.

However, the joint statement announced that US Treasury Secretary Janet Yellen has approved exceptions to both Signature Bank (SBNY) and Silicon Valley Bank (SVB) today that allow the banks’ depositors to receive more than the 250,000 USD insured amount promised by FDIC on Monday. 

The statement announces that depositors will have access to all of their money, including the uninsured amounts above the 250k limit, starting Monday, March 13 in the country. It was also highlighted that no losses associated with the resolution of Silicon Valley Bank will be borne by US taxpayers’ money.

It should be noted that the banks’ shareholders and certain unsecured debtholders will not be protected. Senior management of both banks has also been removed. Any losses to the Deposit Insurance Fund to support uninsured depositors will be recovered by a special assessment on banks, as required by US federal law.

On a closing note, the US government has announced that “the U.S. banking system remains resilient and on a solid foundation, in large part due to reforms that were made after the financial crisis that ensured better safeguards for the banking industry.” 

Signature Bank (SBNY) ranks 3rd in the list of largest US bank failures in history with $118 billion USD in assets at the time of failure in 2023, Silicon Valley Bank (SVB) ranks 2nd with $209 billion in assets in 2023, and Washington Mutual ranks 1st with $307 billion in assets in 2008.

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(Source, Via)

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Besides Etsy sellers affected by the sudden shut down of Silicon Valley Bank(SVB), many more American companies and businesses have revealed recently that they were affected by the collapse of SVB. Amongst those banking with SVB, the most notable are Vox Media, Roblox, Roku and Circle.

Vox Media

Let’s start with the most famous one in tech circles, Vox Media. Vox Media is the parent company of The Verge – the popular online technology news outlet based in the United States, Vox – the viral American news and opinion website, and Polygon – the entertainment news website that covers news from the video game industry, as well as movies, comics, television and books.

The New York Times reported that Vox Media had a substantial amount of its operational cash in Silicon Valley Bank. The Vox Media personnel who was familiar with New York Times also told that Vox Media’s credit cards, which Silicon Valley Bank issued, had stopped working on Friday.

The personnel also claimed the company does not expect any disruption to its business yet, including payroll to its employees. Penske Media, Vox Media’s largest shareholder, said in a statement that it was ready if the company required additional capital but added that it didn’t foresee any issues for the time being.

Roblox

Roblox, the 21st century viral online game platform and game creation system, has also been affected by Silicon Valley Bank’s shutdown by regulators. According to Forbes, Roblox Corporation held 5% of its $3 billion in cash (150 million USD) at the bank. However, according to a filing, the video game company said SVB’s collapse will “have no impact” on its day-to-day operations.

Unity

Unity Technologies, the American video-game technology maker widely known for its video game engine, Unity, disclosed to authorities in the country today that the company held less than 5% of its cash and cash equivalents at Silicon Valley Bank and expects “minimal impact” from the bank’s collapse.

However, Unity Technologies has swiftly informed its video game publishers using Unity via email to swiftly update their payout institution from SVB to other banks before March 20, 2023 to avoid delays in payments.

Roku

Roku is an American corporation that offers Roku TV, its hardware digital media players, and a service of releasing streaming media content on its TV players.

Roku showed much concern in its SEC filing. The company reports that 487 million USD of its cash was within SVB, which is 26% of the company’s assets. What is more worrying is that Roku’s deposits with Silicon Valley Bank are largely uninsured. At this time, Roku does not know to what extent the company will be able to recover its cash on deposit at SVB.

Circle

American Cryptocurrency firm Circle, the owner of stablecoin USDC, had a massive 3.3 billion USD invested with Silicon Valley Bank, the company revealed in a tweet. That’s around 8 per cent of the company’s total $40 billion, which is held elsewhere.

Circle, stated in a statement, “Like other customers and depositors who relied on SVB for banking services, Circle joins calls for continuity of this important bank in the U.S. economy and will follow guidance provided by the state and Federal regulators.”

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(Source, Source 2, Via 1, Via 2)

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Etsy, the American e-commerce platform famous for DIY handmade or vintage items and craft supplies, is reportedly struggling to pay its sellers on time after the collapse of Silicon Valley Bank(SVB) yesterday.

Sellers on the Etsy platforms reported on Reddit and Twitter today that payments that were due to be credited to their bank accounts yesterday have not been credited by Etsy. In turn, Etsy has sent out an immediate email informing affected sellers, there is a delay in issuing payments to its sellers of the platforms, and the company is currently working with its other payment partners to resolve the matter as soon as possible. 

No concrete day or date was mentioned for how long the delay would last, so it is assumed that Etsy sellers’ funds they earned from selling their products on the website have been withheld by Etsy indefinitely. Thus, this is the first major effect of the SVB bank collapse that has impacted the general American consumer market.

Upon receiving the email, sellers were expressing their concern and anger on social media. Some sellers also went out to report the Etsy payment delays to news outlets such as NBC News, claiming that the Etsy delays will have a “catastrophic effect” on their business. 

NBC quotes American small business owner, Owen McKinney, who runs Kentucky Country Home laser engraving business, that he relies on Etsy’s deposits to pay for items like shipping costs and materials. Because of the Etsy delay, he had already reached out to one of his suppliers to delay an order for materials that he needed for next week.

As per official info online until 31 December 2022, Etsy had over 100 million items in its marketplace and the online marketplace for handmade and vintage goods connected 7.5 million sellers with 95.1 million buyers. In the fiscal year of 2022, Etsy garnered revenue of US$2.6 billion and registered a net loss of US$694 million, as a blitz scaled tech startup. 

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• OnePlus Ace 2V is available for Pre-Order on Giztop

(Source 1, Source 2, Via)

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US banking regulators on Friday issued an immediate notice on Friday, stating that Silicon Valley Bank, one of the country’s largest banks, has its operations shut down by Californian authorities, and the bank’s assets have been seized and taken over by the country’s Federal Deposit Insurance Corporation (FDIC). 

Silicon Valley Bank (SVB) was a commercial bank headquartered in Santa Clara, California. The bank’s customers and depositors are mostly consisted of technology workers in the US, tech startups in Silicon Valley and venture capital-backed companies. The bank used to operate from 29 offices in the United States and from offices in India, the United Kingdom, Israel, Canada, China, Germany, Hong Kong, Ireland, Denmark, and Sweden.

As reported by CNBC, the Silicon Valley Bank bank run is the largest US bank failure since the 2008 global financial crisis that happened more than a decade ago. The interference from regulators comes shortly after the shares of SVB were halted on Friday after tumbling as much as 66% in premarket trading. 

FDIC, the organisation tasked to handle the bank’s closure, has stated that it has created the Deposit Insurance National Bank of Santa Clara, which now holds the insured deposits from SVB. The press release also mentions SVB’s official cheques will continue to clear. The main office in Santa Clara and all branches of Silicon Valley Bank will reopen on March 13 Monday and all insured depositors will have full access to their insured deposits no later than Monday morning.

For context, the FDIC’s standard insurance covers up to $250,000 per depositor, per bank, for each account ownership category. It is unclear exactly how larger accounts or credit lines for companies will be impacted by the closure.

The FDIC said it would seek to liquidate SVB’s assets and that future dividend payments may be made to uninsured depositors. Uninsured depositors will be receiving an advanced dividend within the next week, with potential additional dividend payments as the regulator gradually sells SVB’s assets.

CNBC reports that the closure of SVB would impact not only the deposits but also credit facilities and other forms of financing. The FDIC said loan customers of SVB should continue to make their payments as normal.

United States of America Treasury Secretary Janet Yellen said during testimony to the House Ways and Means Committee on Friday morning that she was “monitoring very carefully” developments at a few banks in the country. Yellen made her comments before the FDIC took over SVB.

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It has been 11 months already since LeEco held its first launch event in the U.S, signaling the official debut of the tech giant in the United States. Obviously, the Chinese company was looking to increase its revenue with the foray into the U.S but it soon hit troubled waters financially, as a result of its huge investment in U.S electric car maker Faraday Future. The financial woes recently led to the resignation of CEO Jia Yueting and also, the company has been cutting down its staff strength gradually. 

What we actually weren’t aware of is that LeEco has laid off almost all of its staff strength in the U.S. Engadget’s Richard Lai recently grabbed a couple of photos of Leeco’s U.S office in San Jose, California and it was entirely devoid of activities with much of the offices looking empty. On inquiry, LeEco disclosed that there are only a handful of employees still working for the company in the U.S. LeEco had nearly 325 persons on its payroll in the US before its finances began to dwindle. This has obviously led to the laying off of a large chunk of that number, put at 85% of its U.S workforce. The Chinese company, regarded as the “Netflix of China” because of its prolific video streaming service, now focuses on Chinese speaking customers and that is a small market which its current workforce can handle.  The company also acquired  Yahoo’s office building in Santa Clara where it hoped to site its U.S headquarters. That property is also likely deserted as well.

Read More: LeEco Sued for Non-Payment of Fees by Chinese Ad Agency

This latest discovery is yet another indication that the tech company isn’t anywhere near staging a return to its glory days. The company was discovered to have closed its only shop in Russia and not long before that, Jia Yueting threw in the towel as CEO. The company also recently pulled out of a deal to buy VIZIO, one of the largest TV makers in the world, citing a lack of financial resources to seal the deal. Even in China, LeEco has had to close down some of its service centres apparently to cut down operational cost. We certainly do hope that the innovative and once sprawling tech giant makes a comeback to the scene sometime soon.

(source)

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Xiaomi’s Vice President of International, Hugo Barra has announced his exit from the company. When Mr Barra left Google a little less than four years ago to join the Chinese smartphone manufacturer, his move generated a lot of positive buzz for Xiaomi which was then referred to as the Apple of China.

Three and a half years down the line and he believes he has had enough. The announcement which was made on his Facebook page also explains the reason for his exit.

The Brazilian’s tenure at the company has seen it expand from a Chinese company into a global brand with footprints in more than 20 countries including India where it announced it made $1 Billion in revenue in 2016. Another of the company’s major achievement last year was its partnership with Google on the Android TV powered Mi Box 3.

READ MORE: Xiaomi Mi MIX Revealed to Have Won Multiple Awards

Xiaomi’s co-founder Bin Lin who also worked for Google has announced that senior VP, Xiang Wang will lead the international arm of the company. Even at that, Xiaomi still needs to find a new English-speaking spokesperson that is familiar to the international tech community at large.

Hugo Barra says he will be taking a break before starting a new adventure in Silicon Valley.

(Source: 1 & 2)

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