Because of a VC funding drought and higher yields on money market funds, deposits left the US banking system.

Regulators at the U.S. Federal Deposit Insurance Corp (FDIC) have asked banks interested in acquiring failed lenders Silicon Valley Bank and Signature Bank to submit bids by March 17, people familiar with the matter said on Wednesday.

Most Republican members want answers from regulators as to why they were "asleep at the switch" over the collapse of Silicon Valley Bank (SIVB.O) and it is premature to discuss legislative solutions to banking problems, the U.S. Senate's No. 2 Republican John Thune said on Wednesday.

The Federal Deposit Insurance Corp deposited $40 billion back into the U.S. Treasury General Account on Tuesday, reversing a $40 billion withdrawal on Friday as the regulator took control of the failed Silicon Valley Bank, Treasury financial data released on Wednesday showed.

SVB, short for Silicon Valley bank, created shockwaves in the markets last week. The bank sold its $21b bond portfolio at a loss. Depositors responded by removing assets from the bank en-masse, initiating a classic bank run as rumors of the bank’s insolvency spread over social media. Popular gaming platform, Roblox, announced they were unsuccessful in withdrawing $150m of company funds before the bank collapsed.

Silicon Valley Bank CEO Greg Becker sold nearly $30 million of stock over the past two years, raising new questions over insider stock sales.

Moody’s Investor Service, better known as Moody’s, has revised its view on the entire U.S. banking system from “stable” to “negative.” They cite rapid deterioration in the operating environment following the bank runs and failure of Silicon Valley Bank (SVB) and Signature Bank. 

The depegging of USD Coin (USDC) and Dai from the United States dollar prompted a frenzy of loan repayments over the weekend, allowing debtors to save a total of more than $100 million on their loans. Following the collapse of Silicon Valley Bank (SVB) on March 10, the USDC price dropped to lows of $0.87 on March 11 amid concerns about its reserves being locked at SVB. MakerDAO’s stablecoin DAI also de-pegged briefly, going as low as $0.88 on March 11, according to CoinGecko. (Cointelegraph)

According to a March 13 tweet by Okcoin CEO Hong Fang, the U.S. affiliate of cryptocurrency exchange OKX had no exposure to defunct U.S. tech bank Silicon Valley Bank (SVB). However, Fong stated that Okcoin’s U.S. dollar wire and ACH deposits have been “immediately paused” due to the regulatory intervention in Signature Bank, Okcoin’s primary partner for customer transactions in dollars. 

In response to recent developments, Maker’s [MKR] price experienced a substantial increase of nearly 30% in the last 24 hours.