Ripple CEO Brad Garlinghouse used his Twitter account on March 12 to discuss the company’s exposure to Silicon Valley Bank (SVB) and reassure his followers about Ripple’s stability.
Ripple had exposure to SVB, Garlinghouse said, but “we don’t expect any disruption to our day-to-day operations, and we already hold the majority of our dollars with a broader network of banking partners.”
His brief tweet was intended to reassure users. “Rest assured Ripple remains in a strong financial position,” she tweeted.
Setting the record straight on SVB Qs:
Ripple had some exposure to SVB – it was a banking partner, and held some of our cash balance. Fortunately, we expect NO disruption to our day-to-day business, and already held a majority of our USD w/ a broader network of bank partners.
— Brad Garlinghouse (@bgarlinghouse) March 12, 2023
Garlinghouse did not specify how much cash the company had in SVB.
Many Twitter users who responded to the thread reacted positively to the statement:
“I never doubted you or Ripple for doing proper risk management,” wrote one user.
I never doubted you or @Ripple to have taken proper risk management. Thank you for the statement.
— EarthAngel.XRP☀️ (@EarthAngel_Xrp) March 12, 2023
Ripple CTO David Schwartz had promised on March 11 qthat the company would issue a statement on its exposure to Ripple “shortly”, although it is not clear that Garlinghouse’s tweet was what he had in mind.
Hours later, the Federal Reserve announced that it had established a $25 billion financing program to help banks with liquidity in times of financial stress.
In another announcement, the Federal Reserve also noted that all Silicon Valley Bank depositors will have access to all their money starting Monday, March 13.
“No loss associated with the Silicon Valley Bank resolution will be borne by the taxpayer,” it added.
Schwartz commented on March 10: “I still don’t understand how a run on a bank can make it insolvent. If the bank was solvent before, that means its assets exceed its liabilities. […] They probably would have become solvent against [sic] the maturity of its 10-year Treasury bonds. But they didn’t get that opportunity because of a bank run.”
The price of XRP (XRP) of Ripple fell from a high of $0.40, rising against market trendson March 9 to a low of $0.35 on March 12 before recovering.
Ripple is involved in a legal battle with the United States Securities and Exchange Commission about the status of its cryptocurrency XRP, but a Ripple executive rated 2022 as a “record year of business and customer growth” for the company. Garlinghouse said in January that I hoped the case would be resolved in June.
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