What happened with Silicon Valley Bank (SVB)? Why did it crash? Who's responsible?
A thread ๐ ๐งต
#SVBCollapse #SVB #SIVB
A thread ๐ ๐งต
#SVBCollapse #SVB #SIVB
1/9
SEC Chair Gary Gensler & Senator Elizabeth Warren launched operation Chokepoint 2.0 somewhere in late 2022.
Chokepoint 2.0 is an operation aimed at crypto companies and getting them unbanked.
No matter how you feel about crypto, this had big consequences outside of it.
SEC Chair Gary Gensler & Senator Elizabeth Warren launched operation Chokepoint 2.0 somewhere in late 2022.
Chokepoint 2.0 is an operation aimed at crypto companies and getting them unbanked.
No matter how you feel about crypto, this had big consequences outside of it.
2/9
In early 2023, the Chokepoint operation harassed the Silvergate bank and its customers, which caused a bankrun and the shutdown of Silvergate.
In early 2023, the Chokepoint operation harassed the Silvergate bank and its customers, which caused a bankrun and the shutdown of Silvergate.
3/9
But this also caused a broader panic in the banking world.
Companies started to pull out of other banks that worked with crypto companies.
But this also caused a broader panic in the banking world.
Companies started to pull out of other banks that worked with crypto companies.
4/9
One of these banks is SVB.
Because some of its existing customers started pulling their money out (due to the broader panic), they needed to get more liquidity, so they sold long-term mortgage bonds at a discount.
One of these banks is SVB.
Because some of its existing customers started pulling their money out (due to the broader panic), they needed to get more liquidity, so they sold long-term mortgage bonds at a discount.
5/9
This caused an almost $2B hole which they initially intended to fill by raising new capital.
They released a press release explaining what they intend to do.
This caused an almost $2B hole which they initially intended to fill by raising new capital.
They released a press release explaining what they intend to do.
6/9
In normal times that wouldn't be a big deal, but because market was already in panic mode, this caused a bank run on SVB and an eventual shut down.
In normal times that wouldn't be a big deal, but because market was already in panic mode, this caused a bank run on SVB and an eventual shut down.
7/9
Why is this problematic? Isn't SVB just another bank?
Well, no. It's a bank that many tech VCs and startups use.
This can cause a big harm to the future of American tech industry.
Why is this problematic? Isn't SVB just another bank?
Well, no. It's a bank that many tech VCs and startups use.
This can cause a big harm to the future of American tech industry.
8/9
The whole mess can be easily traced down to Gary Gensler and Elizabeth Warren. They are responsible for it.
In order to clean the mess up a bail out will be needed, but even more so the removal of Gary Gensler from the SEC.
This was the final straw.
The whole mess can be easily traced down to Gary Gensler and Elizabeth Warren. They are responsible for it.
In order to clean the mess up a bail out will be needed, but even more so the removal of Gary Gensler from the SEC.
This was the final straw.
9/9
Share this post so that it gets more visibility.
Let's not allow Gensler and Warren to get away with it!
#Gensler #Warren #SVB #SVBCrash
Share this post so that it gets more visibility.
Let's not allow Gensler and Warren to get away with it!
#Gensler #Warren #SVB #SVBCrash
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