Chipper Cash held Shs3.7b deposits in collapsed Silicon Valley Bank

A concerned citizen has petitioned Capital Markets Authority (CMA) over a brokerage license it issued to Chipper Technologies also known as Chipper Cash last year to invest in US stock markets.

What you need to know:

  • The bank failed after its stock plummeted last week forcing companies to withdraw their money from the bank.

Chipper Cash Chief Executive Director, Ham Sserunjogi has said the financial technology company held $1m (about Shs372 billion) in deposits at the Silicon Valley Bank at the time of its collapse.

The bank failed after its stock plummeted last week forcing companies to withdraw their money from the bank.

“We had a very limited amount of money (only about $1M) held in our SVB account at the time the bank was taken over by the California regulator,” Mr Sserunjogi said in a statement,  noting that the company expected about half of the funds back by Monday, March 13, 2023, with confirmation from America’s Federal Deposit Insurance Corporation (FDIC).

FDIC protects depositors of an insured bank located in the United States against the loss of their deposits if it fails.

The standard deposit insurance amount is up to $250,000 per depositor, per insured bank, for each account ownership category.

Chipper Cash has digital payment operations serving close to 5 million customers across the globe with a major footprint in African countries including Uganda.

However, the company maintains there was no major impact on its customer operations around the world.  

Mr Serunjogi said the shutting down of Silvergate Bank and Silicon Valley Bank (SVB) within a few days, has been one of the most chaotic and unravelling for the US technology and startup community.

The shutdown has already affected many startups across the globe including Chipper Cash, which has multiple banking relationships across the world.

SVB is one of the many investors with Chipper Cash. The bank had a 2 per cent stake in Chipper Cash at the time of its collapse.

“SVB has been the most important banking partner to the entire Silicon Valley ecosystem; A little-known fact is that five years ago when we were trying to open Chipper’s first bank account, SVB was the only bank that would accept us,” Mr Sserunjogi noted.

FDIC, a body concerned, in a statement released on March 13,  said it had transferred all deposits—both insured and uninsured—and substantially all assets of the former Silicon Valley Bank of Santa Clara, California, to a newly created, full-service FDIC-operated ‘bridge bank’.

The entity said it was an action designed to protect all depositors of Silicon Valley Bank.

Silicon Valley Bank was closed, and its senior managers were removed by the California Department of Financial Protection and Innovation on March 10, and the FDIC was appointed receiver.