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Circle moved assets out of somewhere and into BNY Mellon last week. Where is that somewhere (Was it SVB, since 3.3Bn “remain” in SVB?). When did they move money
by dzink 4y ago
Circle moved assets out of somewhere and into BNY Mellon last week. Where is that somewhere (Was it SVB, since 3.3Bn “remain” in SVB?). When did they move money out of SVB and how much?
Did Circle and USDC trigger the sudden liquidity gap in SVP that triggered the fire sale of 21B at a loss? Is the crypto panic triggering the bank runs?
“Last week, we took action to reduce bank risk and deposited $5.4bn with BNY Mellon, one of the largest and most stable financial institutions in the world, known for the strength of their balance sheet and as a custodian.
$3.3bn of USDC’s cash reserves remain with SVB. As of Thursday, we had initiated transfers of these funds to other banking partners. ”
- pishpash 4y agoCrypto first, tech second, then crypto/tech intermediaries, then exposed regional banks, then funds and general banks, etc. etc.
- oarabbus_ 4y ago>Did Circle and USDC trigger the sudden liquidity gap in SVP that triggered the fire sale of 21B at a loss? It seems unlikely that would be the case, 5.4B would represent only 2.5% of their AUM at the time of failure. However the Fed did reduce the bank cash reserve requirement to 0% in March 2020, so it's technically in the realm of possibility... but having to sell off assets after a 2.5% drawdown is analogous to being 40x leveraged. It would be unbelievably poor risk management if this were the case, and seems more likely a much larger event than a few crypto companies (which are small in the grand scheme of things) withdrawing deposits.
- jacobsimon 4y agoHad the same thought, but why would they choose to reduce bank risk unless they already knew about the liquidity gap?
- extheat 4y agoI believe their last earnings call was what precipitated the fear in the bank and ultimately what caused the big spike in withdrawals that led to them running out of immediately free cash.