HomeUS News updateEtsy delays payments to sellers due to Silicon Valley Bank collapse

Etsy delays payments to sellers due to Silicon Valley Bank collapse

Etsy is warning sellers that processing payments are delayed due to the collapse of Silicon Valley Bank on Friday, according to an email the company shared with NBC News.

The online do-it-yourself goods megashop said it used SVB to facilitate disbursements to some sellers, and it was working with other payment partners to release deposits.

“We want to let you know that your deposit scheduled for today is delayed,” ATC’s email said.

“We know you rely on us to help you run your business and we understand how important it is to have access to funds when you need them,” the email continued. “Please know that our teams are working hard to resolve this issue and send you your funds as soon as possible.”

Etsy did not immediately respond to a request for comment.

Etsy boasts of 7.5 million sellers worldwide. Regulators placed SVB into receivership near noon Friday to end a bank run on the tech lender that began Wednesday after it said it was seeking more than $2 billion.

One affected Etsy seller told NBC News that the deposit delay would have a “devastating” effect on her business.

Owen McKinney, who runs a Kentucky Country Home laser engraving business, said in an email that he relies on deposits to pay for items such as shipping costs and materials. He said that he had already reached out to one of his suppliers to delay the order for the essential material for the next week.

“At this time, Etsy has not provided a time frame for depositing funds,” McKinney said. “While I do have a website, Etsy remains a big part of my business.”

The drama with SVB began earlier this week after the bank revealed it sold $21 billion of securities and proposed to offer more than $1 billion in shares, all for “general corporate purposes” of fundraising. For.

That move raised eyebrows among investors who wondered why SVB would suddenly need to raise so much money. It also alarmed depositors, many of whom suddenly wondered if their money was safe and began withdrawing funds.

On Friday, California’s Department of Financial Protection and Innovation said it was taking over and closing SVB to protect deposits, naming the Federal Deposit Insurance Corporation as its receiver. The FDIC has created a separate entity where all insured SVB deposits – up to $250,000 per depositor – will be available as of Monday morning.

The shutdown came after a tumultuous morning for SVB, during which trading of its shares was halted as they fell double digits before the market opened. The drop came after a more than 60% drop on Thursday.

According to FDIC data, the closure is the largest bank failure since the 2008 financial crisis and the second largest in US history after the collapse of Washington Mutual.

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