Tech billionaire and Republican donor Peter Thiel is facing accusations of being responsible for the run on the bank that resulted in the closure of Silicon Valley Bank. Critics are pointing fingers at Thiel, claiming that his influence caused businesses to withdraw their funding from the bank, which led to a bank run and California regulators intervening.
Investigative journalist Dave Troy tweeted that SVB did not hedge its risks properly against two threats: concentration of influence by Thiel and rising interest rates. He called it mismanagement but clarified that it wasn’t fraud, and the bank still has sufficient assets to meet most of its obligations. CNBC host Sara Eisen echoed Troy’s sentiments and called for more scrutiny of Thiel and Bill Ackman for “yelling fire in a crowded theater” during the SVB collapse.
Others have raised concerns over Thiel’s promotion and subsequent profiting off of crypto investments after the market crash as a reason to be suspicious of his withdrawals. Tech journalist Kara Swisher tweeted that the same person who was touting crypto and trashing critics while selling crypto is now withdrawing funds from SVB.
Who is Peter Thiel? What is Billionaire Peter Thiel Role in the collapse of Silicon Valley Bank?
According to Bloomberg, Thiel’s venture capital firm Founders Fund had withdrawn all of its funding from SVB and advised its portfolio companies to do the same. Founders Fund also hosted a capital call, which requested portfolio companies to move funding to SVB. However, the transfer faced technical difficulties, and Founders Fund implored investors to transfer their money to other banks.
Regulators in California closed SVB on Friday after its attempts to raise capital failed. The bank’s failure is one of the largest since 2008, with investors withdrawing $42 billion a day after the bank sold off treasuries at a loss, causing a run on the bank. SVB responded quickly by selling $21 billion in bonds.
The Biden administration took measures on Monday to safeguard depositors at the bank.
Peter Thiel is a notable Republican donor who provided campaign funds to J.D. Vance in the Ohio Senate race and Blake Masters in the Arizona Senate race in the 2022 midterm elections.
In conclusion, Peter Thiel is being accused of sparking the run on the bank that led to the closure of Silicon Valley Bank. Critics have questioned Thiel’s influence and promotion of crypto investments after the market crash as possible reasons for his withdrawals from SVB.
Thiel’s venture capital firm Founders Fund advised its portfolio companies to withdraw their money from the bank, which may have caused mass withdrawals. The Biden administration has taken measures to protect depositors at the bank. Thiel is a notable Republican donor who provided campaign funds to candidates in the 2022 midterm elections.
Source: Mckpage.com
