A fortnight after the newly appointed Silicon Valley Bank (SVB) chief executive officer (CEO) cheered customers to return funds to the bank, the Federal Deposit Insurance Corporation (FDIC) has reportedly sent emails informing customers that their funds were in receivership.
Mayopolous woos depositors
Developments emanating from the embattled SVB, after Mayopolous’ advice, have shocked depositors as the FDIC has reportedly put depositors’ funds in receivership.
Most customers had returned their money to the bank following the advice of Tim Mayopoulus, the newly appointed CEO of SVB. Mayopoulus had assured the customers that the bank was open for business and FDIC could fully protect their returned deposits.
Further, he invited firms who had relocated their funds from the bank to return them to SVB as a deposit diversification strategy. He also noted that the bank was open for new customers, actively opening accounts and processing new loans.
Depositors’ funds placed in receivership
The depositors who heeded the call by Mayopolous to return their money to the bank might be in trouble after the action by FDIC.
The FDIC emailed the customers that any money held through non-US “eurodollar” accounts and the funds returned to the bank were in receivership.
Information regarding receivership has attracted criticism from crypto enthusiasts, as most took to Twitter to criticize the FDIC move.
Mike Dudas accused the U.S. government and representatives appointed in financial matters of deception and theft. He further noted that the actions taken by FDIC on the SVB case went contrary to the banking laws.
Another Twitter user noted that anybody who returned their funds to SVB after its closure was in trouble.
The California Department of Financial Protection and Innovation (CDFPI) closed SVB on March 10 after the bank failed to raise funds. Afterward, the FDIC was appointed the receiver. Under U.S. banking law, the receiver is responsible for winding up the prior organization’s operations.