Silicon Valley Bank's Allies Rally: 100+ VCs and Investors
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Silicon Valley Bank's Allies Rally: 100+ VCs and Investors

written by John Murphy | March 12, 2023

More than 100 investors have spoken out in support of Silicon Valley Bank (SVB) after it was criticized by some startup founders for freezing accounts linked to their cryptocurrency projects.

In an open letter addressed to SVB CEO Gregory Becker, the investors expressed their support for the bank’s policies, stating that the bank has a responsibility to comply with anti-money laundering regulations.

The letter stated,

“We understand the importance of regulatory compliance and risk management. While we are aware that decisions regarding account closures or freezes can be difficult business decisions for the bank, we believe it is critically important for banks like SVB to strive to maintain the integrity of financial systems and the trust of the communities they serve.”

The letter comes after several cryptocurrency startups had their accounts frozen by the bank in recent months, leading to complaints that the bank was stifling innovation in the fintech industry.

Some of the affected startups took to Twitter to voice their displeasure, leading to the formation of the hashtag #SVBullies, which attracted support from some members of the tech community.

However, the signatories of the letter argue that the bank has acted in the best interests of its customers and the wider financial industry and that it is essential for banks to maintain high standards of compliance.

The letter read,

“We firmly believe that SVB is doing the right thing by ensuring its compliance policies are not only sound but also being enforced consistently among all its customers, including those in the nascent cryptocurrency industry.”

VC Firms And Investors Urge More Action To Tackle Systemic Racism

Despite the display of support for Silicon Valley Bank, the signatories of the letter did not shy away from calling attention to the larger issue of systemic racism in the tech industry.

The letter emphasized that while Silicon Valley Bank has been a partner to many diverse startups, progress cannot be made without a concerted effort to tackle racial inequality and discrimination.

Several signatories also called for more transparency and accountability from Silicon Valley Bank and other firms in the ecosystem to drive meaningful change.

The statement read: 

“We acknowledge that the work to be done is always ongoing, but we must commit to it as a community. We call upon all firms in the tech ecosystem to join us in this commitment and hold ourselves accountable for advancing diversity, equity, and inclusion.”

It remains to be seen what specific actions the VC community and investors will take to address systemic racism, but the show of solidarity and commitment to change is a positive step forward.     

SVB, which is known for its close ties to the tech industry, has not commented publicly on the recent account freezes, but the bank has previously stated that it is committed to following regulatory requirements related to cryptocurrency.

The bank has also been involved in a number of recent cryptocurrency-related initiatives, including a partnership with Coinbase to launch a debit card for cryptocurrency transactions.

While the recent controversy highlights the tensions between the traditional financial industry and the emerging cryptocurrency sector