- Ripple Labs has faced challenges due to its association with Silicon Valley Bank is subject to scrutiny.
- News of the bank’s collapse raised concerns about Ripple’s financial stability.
- Ripple remains confident in its financial position and assures its users that its day-to-day business operations will continue without interruption.
Ripple Labs has constantly made headlines for its battle with Securities and Exchange Commission about the state of its digital currency, XRP. However, this time around, the crypto company is facing scrutiny over its association with a Silicon Valley bank.
The Fed’s Actions on the Silicon Valley Bank Collapse
after the collapse on March 10th Due to the influx of deposits, the remaining assets of Silicon Valley Bank (SVB) were placed under FDIC control. The Federal Reserve has since established a $25 billion financing program to help banks provide liquidity in times of financial stress.
The Fed also reassured Silicon Valley bank depositors that they will have access to all of their funds starting March 13 and that taxpayers will not suffer any losses associated with the Silicon Valley bank’s decision.
Brad Garlinghouse: Ripple has had some exposure
The news raised concerns about Ripple’s financial stability and the impact of the SVB collapse on its day-to-day business. CEO Brad Garlinghouse to Twitter with an update to address the concern among the Ripple community.
Setting the record directly on SVB Qs:
Ripple had some SVB dealings – it was a banking partner, and held some of our cash balance. Fortunately, we do not expect any disruption in our day to day business, and we already own the majority of USD with a wider network of partner banks.
– Brad Garlinghouse (@bgarlinghouse) March 12, 2023
In its statement, RippleCEO disclosed that the company had stored some of its cash reserves with the now-failing tech lender, though Garlinghouse did not disclose the full amount which is now stuck in limbo. Despite this revelation, Garlinghouse assured users that Ripple does not expect disruptions to its day-to-day business, claiming that it has already held most of its dollars with a wider network of banking partners.
on the flip side
- The Federal Reserve is being asked to take further action to address the problems that led to the collapse of the Silicon Valley bank and to prevent similar situations from happening again.
- The undisclosed amount of money stuck in Silicon Valley Bank raises concerns about potential weaknesses in Ripple’s financial practices.
Why should you bother
The recent news regarding Ripple Labs and Silicon Valley Bank underlines the need for financial stability and preparedness in the cryptocurrency industry. As the most important startup bank in the US, the collapse of a Silicon Valley bank could have far-reaching consequences for US startups, especially early-stage crypto companies.
Stay informed of the latest developments in the Ripple space:
Ripple CEO: The US is falling behind on the SEC’s XRP suit
Stay up to date with the latest developments in the cryptocurrency market:
Is the bull trap confirmed? Market cap falls below $1 trillion, and bitcoin sinks after $20,000
