Revolut, crypto’s outstretched hand to SVB investors

With the bankruptcy of the Silicon Valley Bank (SVB), capital flight has spilled over to a number of fintech companies including the overseas company. Like Revolut which is inextricably linked to the crypto world.

Following audits by the Prudential Regulatory Authority (PRA), SVB UK Limited declared insolvency. Triggering the capital flight that had already started the day before in the direction of crypto. Or rather towards companies such as Wise and Revolut.

Revolut, the hand extended by the crypto world

The US authorities in the state of California closed SVB the day before yesterday and the same company 24 hours ago declared insolvency.

Those who smelled disaster and those who managed to salvage what they could in the hours leading up to the closure and the halt in operations salvaged what they could.

Significant sums poured in for fintech companies such as Wise and Revolut.

According to insiders of the company co-founded by Nikolay Storonsky and Vlad Yatsenko (Revolut), the company received sixteen times as many payouts on a normal day on Saturday alone.

This huge discrepancy with Revolut’s numbers stems precisely from the flight of capital from SVB.

What is revolut?

Revolut LTD is a British fintech company that has established itself as a reliable exchange with banking, crypto, peer-to-peer and prepaid services.

Yesterday, both inbound and outbound operations of SVB’s UK branch were blocked.

The blockade was ordered by the Bank of England to protect against possible contagion and the savers themselves.

Fred Destin, of the risk management firm Stride, said that even from his perception there is a flow of capital from companies that had capital in SVB to other companies.

The founders receiving the payouts according to Destin are precisely Wise, Revolut and other fintech companies.

For the super investment manager, it is prudent not to deposit one’s capital on one bank as some did with Silicon Valley Bank.

“It could be that the Bank of England says it will freeze SVB’s assets to prevent a flight. So if you’re a startup, people have no choice but to make sure their cash is safe – it’s a matter of survival. Wise and Revolut are easy to set up and are licensed institutions so you can transfer a decent amount of money into them.”

An investor in venture capital at Triple Point, Mr Seb Wallace, in this regard stated the following:

“Standard operating procedure in venture back businesses would be to open an account with one of Starling, Revolut, Monzo et al [and] most startups have a Wise account. But this [collapse] has driven home an approach prudent with cash management and companies have a clear need now to have multiple bank accounts to spread risk”.

Already this autumn, in November last year to be precise, SVB had handed over the helm of operations to a sister company.

SVB wanted to disabuse observers of the difficult time it was in and at the same time reassure everyone.

On Saturday, SVB itself had intervened to explain that it had an untroubled financial position, but the charade lasted 24 hours just long enough to turn around.

On Sunday SVB in the UK declared insolvency, admitting that it had been mistaken in its facts.

The bank expressed its regret with these words:

‘We announce that following conversations with the Prudential Regulatory Authority, there is an intention, barring any events to occur, to insolve Silicon Valley Bank UK Limited from Sunday evening”.

Not just Revolut

The richest man in the world is back in the news and he couldn’t have chosen otherwise from his favourite stage, Twitter.

On the social networking site Elon Musk spoke in response to a tweet on the subject of Silicon Valley Bank after the bank’s recent collapse, but at least one Tesla investor believes Twitter should be the one to make the acquisition, as first reported by Insider on Saturday 3 March.

Razer CEO Min-Liang Tan suggested an interesting investment to Elon Musk in a tweet.

For Tan, Musk should invest in SVB by saving it.

The purchase should be made by Twitter, which would then also become an exchange and storage platform.

Musk, who is no stranger to reading and responding to those who call him out on his social, responded to the Tweet with a direct “I’m open to the idea”.

Whether or not Musk will buy SVB’s ashes is still a long and uncertain road, but we will see if there are any moves in this direction in the coming days.