Q: Statement on SVB risk, please?
What a crazy series of events! No client capital is affected by the SVB wind down; all funds are held with Apex Clearing, their partner banks (not SVB), or with our partner’s (ex: Carlyle/ARK) fund manager custodians (also not SVB). We're doing work to understand the risk of contagion to other financial companies, but as of today, we're only invested in Schwab and HDFC Bank (a bank in India). We'll be sure to follow up as we learn more.
As a follow-up to the above: Schwab fell sharply at the open as shockwaves from SVB's collapse rippled through the financials sector. CFO Peter Crawford provided a long update but in short, he reiterated Schwab's strong liquidity position and ability to navigate today's macro challenges. Bank stocks are up off their lows, and Schwab has followed suit recovering a lot of the losses from this AM. We're doing more work today / not in a rush to make any moves, but this very well may be an overreaction, with Schwab now down more than 30% over the last month.
Q: Does Titan have FDIC / SIPC insurance?
A: Yes, there are two different kinds of coverage that are relevant to your Titan account: FDIC and SIPC. As long as you have opted into our Cash APY product, a portion of your cash holdings here at Titan are covered by FDIC. This includes both cash holdings in your Titan cash as well as strategic cash holdings. FDIC covers accounts up to $250,000 in deposits per account owner/ownership category at each insured bank. Your security holdings here at Titan are also covered under SIPC, which protects your funds in the event of brokerage firm failure or the disappearance of your assets. This means that each type of account held with Titan is covered up to $500k (up to $250k in cash). So, you could have $500k coverage on your individual Titan account and separately also have $500k coverage on your traditional IRA account, $500k coverage on your Roth IRA account, etc.
Q: What do you see as the main risk for crypto?
A great question and one we tried to lay out in our most recent crypto trade update this Monday. The main risk we see for crypto currently is that the ecosystem has basically been de-banked, especially when it comes to 24/7 fast payment rails. The Silvergate Exchange Network (SEN) and Signature Bank’s “Signet” (both of parent banks that collapsed), were real-time payment platforms that allowed commercial crypto clients the ability to make payments in dollars at any time. Major companies like Coinbase relied on Signet to allow clients to instantaneously transfer/settle funds. If both platforms go out of commission, users may have trouble efficiently moving capital, which may impact overall crypto liquidity. As reflected in our trade, we anticipate this may have an outsized impact on the prices of already less-liquid alt-coins.
Ask Titan Anything is intended to be informational in nature and does not take into account the specific objectives, financial situation, or particular needs of any specific person. Nothing in this content should be construed as investment advice, or a recommendation to buy or sell securities.
Cryptocurrency trading is provided by Apex Crypto LLC. Apex Crypto is not a registered broker-dealer or a member of SIPC or FINRA. Cryptocurrencies are not securities and are not FDIC or SIPC insured. Apex Crypto is licensed to engage in virtual currency business activity by the New York State Department of Financial Services. Cryptocurrency execution and custody services are provided by Apex Crypto LLC (NMLS ID 1828849) through a software licensing agreement between Apex Crypto LLC and Titan Global Technologies LLC. Please ensure that you fully understand the risks involved before trading: apexcrypto.com/legal.
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