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The U.S. Senate Banking Committee will hold the first of several hearings on the collapse of Silicon Valley Bank and Signature Bank on March 28, Chairman Sherrod Brown (D-Ohio) said yesterday, Reuters reported. The first hearing will hear from witnesses including Federal Deposit Insurance Corporation Chair Martin Gruenberg, Federal Reserve official Michael Barr, and Nellie Liang, an under secretary at the U.S. Treasury Department, according to a statement from Brown. "It is critical that we get to the bottom of how Silicon Valley Bank and Signature Bank collapsed so that we can maintain a strong banking system, protect Americans' hard-earned money, and hold those responsible accountable, including the CEOs," Brown said. The U.S. House of Representatives Financial Services Committee previously said it will hold a bipartisan hearing on the banks' collapse on March 29, with Barr and Gruenberg testifying again.

As Silicon Valley Bank deteriorated late last year and regulators began internally flagging flaws in its risk management, the lender opened up the credit spigot to one group: insiders, Bloomberg News reported. Loans to officers, directors and principal shareholders, and their related interests, more than tripled from the third quarter last year to $219 million in the final three months of 2022, according to government data. That’s a record dollar amount of loans issued to insiders, going back at least two decades. The surge in loans to high-up figures may draw scrutiny as the Federal Reserve and Congress investigate the breakdown of Silicon Valley Bank, the biggest U.S. bank collapse in more than a decade. The firm — one of three U.S. lenders to fall this month — collapsed after investors and depositors tried to pull $42 billion in a single day and it failed to raise capital to shore up its finances. The government reports don’t disclose loan recipients or their purpose, and there have been no allegations of wrongdoing connected to the insider loans.

SVB Financial Group said on Tuesday the U.S. Federal Deposit Insurance Corporation had taken "improper actions" to cut it off from cash held at its former subsidiary Silicon Valley Bank, which was seized by regulators to stem a national bank run, Reuters reported. SVB Financial made the accusations in court filings ahead of its first bankruptcy hearing on Tuesday afternoon in Manhattan. It filed for chapter 11 protection about a week after California banking regulators on March 10 closed Silicon Valley Bank in the largest U.S. bank failure since the 2008 financial crisis. The collapse this month of the Santa Clara, California-based bank and Signature Bank, another U.S. midsized lender, prompted a rout in banking stocks as investors worried about other ticking bombs in the banking system and led to UBS Group AG's takeover of 167-year-old Credit Suisse Group AG to avert a wider crisis. SVB Financial is exploring options, including a potential bankruptcy sale, for its venture capital and investment banking units, which were not included in the FDIC takeover of Silicon Valley Bank, while continuing to operate its businesses, it said on Monday.

FTX has attracted bidders including Miami International Securities Exchange for its crypto-derivatives platform, LedgerX, one of the few solvent pieces of Sam Bankman-Fried’s former empire, Bloomberg News reported. The exchange, known as MIAX and owned by Miami International Holdings Inc., made an offer for LedgerX, which is being sold in FTX’s bankruptcy proceedings, according to people with knowledge of the matter. Other bidders include Kalshi Inc., the people said, asking not to be identified because the discussions are private. The size of the bids couldn’t immediately be learned. LedgerX would give MIAX a registered platform to expand its presence in the crypto industry. MIAX already operates a clearinghouse it got as part of its 2020 acquisition of the Minneapolis Grain Exchange, but LedgerX technology would give it a window into the crypto industry. Kalshi, an exchange dedicated to trading on future events, became federally regulated by the Commodity Futures Trading Commission in 2020. It received $30 million in 2021 from Henry Kravis and other investors, including Sequoia Capital and Charles Schwab. It uses LedgerX as its clearinghouse, making any acquisition a natural fit for the company. Preliminary non-binding bids were due Jan. 25, and an auction is set for April 4. Talks are ongoing, and bids could change depending on the outcome of the negotiations, the people said.

Celsius custody account holders can receive 72.5% of the cryptocurrency in their custody accounts after Bankruptcy Judge Martin Glenn approved a settlement in the defunct crypto lender's bankruptcy case, TheBlock.co reported. Judge Glenn gave the green light to a settlement between the Celsius debtors, the unsecured creditors committee and an ad hoc group of custodial account holders during a hearing on Tuesday in the U.S. Bankruptcy Court for the Southern District of New York. Individual custody account holders must opt into the settlement. In turn, the Celsius debtors will agree to settle all causes of action against custody account holders with respect to their custody assets, according to the terms of the deal. "Because custody holders have the right to opt in, nobody is being forced to accept this settlement. I think that’s quite important here,” Judge Glenn said.

The Federal Deposit Insurance Corporation on Monday decided to break up Silicon Valley Bank (SVB) and hold two separate auctions for its traditional deposits unit and its private bank after failing to find a buyer for the failed lender last week, Reuters reported. It will seek bids for Silicon Valley Private Bank until March 22 and for the bridge bank until March 24. The private bank, which is housed within SVB's retail operations, caters to high net-worth individuals. Bank and non-bank financial firms will be allowed to bid on the asset portfolios, the regulator said. First Citizens BancShares Inc, one of the biggest buyers of failed U.S. lenders, has submitted a bid for all of Silicon Valley Bank, one source with knowledge of the matter said. If the FDIC decides to receive bids for parts of SVB, First Citizens also expects to bid. Bloomberg reported earlier on their interest on SVB.

The collapse of Silicon Valley Bank and Signature Bank has created a new worry for many small businesses: what to do with their cash, the Wall Street Journal reported. Some owners of small and midsize businesses are moving funds to other institutions, splitting them between multiple banks, moving cash into money-market funds or buying Treasurys. Others are more closely reviewing the finances of their banks, while some entrepreneurs are even thinking about the potential risks for key partners and customers. Responding to the recent banking-industry turmoil is particularly challenging for small businesses, which typically don’t have large finance teams or sophisticated cash-management strategies. Small-business owners with conservative habits often keep lots of cash on hand as a cushion. Loan restrictions can make it tough to split that cash among multiple institutions. “I think we need to analyze banks just like they analyze us,” said Brent Frederick, owner of Minneapolis-based Jester Concepts, which has five restaurants including Butcher & the Boar and a concession operation that includes food trucks, a food trailer and stadium locations. “What is the bank’s core value? What do their balance sheets look like?”

Managers of FTX are suing a company affiliate based in the Bahamas, seeking a bankruptcy court ruling to end a dispute with liquidators there over who should control and distribute assets of the failed cryptocurrency exchange, WSJ Pro Bankruptcy reported. The managers said in their complaint they are suing because of “serial threats” by the liquidators of affiliate FTX Digital Markets Ltd. to try to move FTX’s bankruptcy proceedings to the Bahamas to pursue the company’s cash, crypto and other assets there. FTX filed for chapter 11 bankruptcy protection in November at odds with the Bahamian liquidators of FTX Digital Markets over control of the company’s business and an unknown amount of digital currency. The liquidators and FTX had cooled tensions in January, agreeing to share information and secure and distribute assets belonging to company entities in the Bahamas and abroad. But in their lawsuit filed Sunday in U.S. Bankruptcy Court in Wilmington, Del., FTX’s U.S. managers said the liquidators “continue to cast confusion” over of the company’s property.

The U.S. Federal Deposit Insurance Corp (FDIC) is planning to relaunch the sale process for Silicon Valley Bank after failing to attract buyers in its latest auction, with the regulator seeking a potential break-up of the failed lender, Reuters reported. One of the options under consideration by the regulator is a sale process for the private bank of SVB for which bids are due on Wednesday. The private bank, which is housed within SVB's retail operations, caters to high net-worth individuals. The FDIC will invite bids for SVB's depositary bank, which is also part of its retail operations and includes all its consumer deposits, on Friday in a separate auction process. The FDIC, which insures deposits and manages receiverships, has previously informed banks mulling offers in the auctions for SVB and Signature Bank that it was considering retaining some of the assets that are underwater at the failed lenders.

Investors who bought bonds in Silicon Valley Bank’s parent company as the bank teetered are risking a bankruptcy-court battle with the Federal Deposit Insurance Corp. over billions of dollars in assets, WSJ Pro Bankruptcy reported. Friday’s chapter 11 filing by SVB Financial Group, the parent company of the failed bank, shines the spotlight on legal questions that have lingered since the 2007-09 financial crisis about when bank holding companies are responsible for making up losses stemming from failed banking subsidiaries. The U.S. government’s decision to protect all depositors at Silicon Valley Bank, regardless of the size of their accounts, is expected to cost the FDIC, which normally only insures bank deposits up to a $250,000 limit. The FDIC can make up any losses to its deposit insurance fund with a special assessment on other banks. But the FDIC, which now runs Silicon Valley Bank as its receiver, could seek to collect funds from the parent company’s nonbank assets to help it cover depositor losses. If the FDIC’s claims on SVB Financial are deemed to be stronger than bondholders’, that could weigh on their recoveries in the chapter 11 case. The legal questions are murky. The FDIC has failed in some past efforts to hold parent companies responsible for their banking units’ losses, such as when it lost a bankruptcy-court fight to recover $900 million from the holding company of Alabama’s Colonial Bank following its 2009 failure.