This week, the tech industry experienced a significant disruption when Silicon Valley Bank, a major backer of startups, suddenly closed. The Federal Deposit Insurance Corporation (FDIC) announced the closure of SVB, the 16th-largest bank in the U.S., marking the worst financial institution failure since the Great Recession. Numerous companies have been impacted by the closure, including crypto firm Circle, kids retailer Camp, and coffee company Compass Coffee, who experienced a transaction freeze as a result. Etsy, who often referred entrepreneurs to SVB, was the latest company to voice concerns after announcing a transaction freeze. The company reached out to sellers, informing them that deposits were delayed, and working with other payment partners to issue deposits as soon as possible. Affected sellers have taken to social media to tell their stories, expressing their frustration and helplessness. SVB's closure highlights the fragility of the tech industry, and serves as a reminder of the importance of having a back-up plan in place.
Etsy pauses payments following Silicon Valley Bank closure