Tech mogul and Republican campaign donor Peter Thiel is being accused of sparking the run on the bank that forced regulators to close down Silicon Valley Bank.
Journalists and critics have turned their focus on Thiel in the wake of SVB's collapse, accusing him of influencing businesses to withdraw their funding from the bank. His efforts are thought to be the first that eventually sparked the bank run, leading to California regulators intervening.
"To be clear, SVB did not properly hedge its risks against two threats, 1) concentration of influence by Peter Thiel, 2) rising interest rates," tweeted investigative journalist Dave Troy. "That was mismanagement, but it still wasn't fraud, and they still have sufficient assets to meet nearly all of the bank's obligations."
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"There should be more scrutiny of Peter Thiel and Bill Ackman for yelling fire in a crowded theater in this SVB collapse," tweeted CNBC host Sara Eisen.
Others turned their focus to Thiel's promotion and subsequent profiting off of crypto investments after the market crashed as a reason to be suspicious of his withdrawals. "You mean the guy who was touting crypto and trashing critics while he was selling crypto? That guy? Shocker!" tweeted tech journalist Kara Swisher.
Thiel's venture capital firm Founders Fund had pulled all of its funding from SVB as of Thursday morning, according to Bloomberg. The company also advised its portfolio companies to withdraw their money from the bank, saying there was no downside to moving their money out of the bank. The timing has led some to conclude that the investor's actions may have led to mass withdrawals.
Founders Fund also hosted a capital call on Thursday, which venture capital firms do to ask investors to send them money to make investment startups. Founders Fund asked portfolio companies to begin moving funding to SVB. When Founders realized that technical problems were delaying the transfer, they implored investors to transfer money to other banks.
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SVB, which was the 16th largest federally insured bank, was closed by regulators in the state Friday after attempts to raise capital failed. The bank failure is one of the largest since 2008. The bank scared investors earlier in the week when it announced that it sold off treasuries at a loss, causing a run on the bank. SVB customers withdrew $42 billion a day after the bank began falling underwater. The company quickly responded by selling $21 billion in bonds.
The Biden administration took measures on Monday to protect depositors at the bank.
Thiel is a notable Republican donor, providing campaign funds to J.D. Vance in the Ohio Senate race and Blake Masters in the Arizona Senate race in the 2022 midterm elections.