Ripple CEO assures ‘strong financial position’ despite SVB collapse
Ripple CEO Brad Garlinghouse took to Twitter on March 12 to discuss the company’s exposure to Silicon Valley Bank and reassure his followers of Ripple’s stability.
Ripple had exposure to SVB, Garlinghouse said, but “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.”
His short tweet thread was intended to reassure users. “Rest assured, Ripple remains in a strong financial position,” he 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 the amount of cash the company had in SVB.
Many Twitter users responding to the thread reacted positively to the statement.
“I never doubted you or @Ripple to have taken proper risk management,” one user wrote.
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 chief technology officer David Schwartz had promised on March 11 that the company would release a statement on its Ripple exposure “shortly,” although it is not clear that the Garlinghouse tweet was what he had in mind.
Hours later, the Federal Reserve announced it had established a funding program of $25 billion to assist banks with liquidity during times of financial stress.
In another announcement, the Federal Reserve said that all depositors of Silicon Valley Bank would have access to all of their money starting Monday, March 13.
“No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer,” it added.
Related: Ripple survey: 97% of payment firms believe in the power of crypto
Schwartz commented on March 10, “I still don’t understand how a run on a bank can cause it to become insolvent. If the bank was solvent before, that means its assets exceed its obligations. […] They probably would have become solvent against [sic] as their 10 year treasuries matured. But they didn’t get that opportunity due to a run.“
The price of Ripple’s XRP (XRP) dipped from a high of $0.40, rising against market trends, on March 9 to a low of $0.35 on March 12 before recovering.
Ripple is engaged in a legal battle with the United States Securities and Exchange Commission over the status of their XRP cryptocurrency, but a Ripple executive called 2022 a “record year of business and customer growth” for the company. Garlinghouse said in January that he expected to see the case resolved in June.