US regulators have shut down Silicon Valley Bank (SVB) and taken control of its customer deposits, after the firm revealed financial troubles that sparked panic about the state of the banking industry.
The Federal Deposit Insurance Corporation said the moves were made to “protect insured depositors”.
The bank – a key tech lender – had been scrambling to raise money.
That prompted many firms to withdraw funds.
The company’s shares also saw their biggest one-day drop on record on Thursday, plunging more than 60% and lost more in after-hours trade.
The falls came after SVB said it was trying to raise $2.25bn (£1.9bn) to plug a loss caused by the sale of assets affected by higher interest rates.
Concerns that other banks could face similar problems led to widespread selling of bank shares globally on Thursday and early Friday.
SVB did not respond to a request for comment immediately.
A crucial lender for early-stage businesses, SVB is the banking partner for nearly half of US venture-backed technology and healthcare companies that listed on stock markets last year.
Speaking in Washington on Friday, US Treasury Secretary Janet Yellen said she was monitoring “recent developments” at Silicon Valley Bank and others “very carefully”.
“When banks experience financial losses, it is and it should be a matter of concern,” she said.
