An employee walks past a blanket marked by Etsy Inc. at the company’s headquarters in Brooklyn.
Victor J. Blue/Bloomberg via Getty Images
Etsy is warning the seller that The fall of Silicon Valley Bank on Friday is causing delays in payment processing, according to an email from the company shared with NBC News.
The online do-it-yourself superstore says it’s already using SVB to facilitate disbursements for some merchants, and it’s working with other payment partners to issue deposits.
“We would like to let you know that there is a delay with your deposit scheduled for today,” the email from Etsy said.
“We know that you trust us to help run your business, and we understand how important it is for you to get your money when you need it,” the email continued. “Know that our teams are working on getting this resolved and sending you money as quickly as possible.”
Etsy did not immediately respond to a request for comment.
Etsy claims to have 7.5 million sellers worldwide. Regulators placed SVB on the receiving list around noon Friday to end banking operations for the tech lender that began on Wednesday after it said it was looking to raise more than 2 billion dollars.
One affected Etsy seller told NBC News that the delay in depositing would have a “catastrophic” impact on his business.
Owen McKinney, who runs a laser engraving business at Kentucky Country Home, said in an email that he relies on a deposit to pay for things like shipping and materials. He said he had contacted one of his suppliers to request a delay in ordering the materials he needed for next week.
“At this time, Etsy has not provided a timeframe for depositing,” McKinney said. “Even though I have a website, Etsy is still an important part of my business.”
The tragedy with SVB began at the beginning of the week when the bank revealed that sold about $21 billion of securities and proposed to offer more than $1 billion in stock, all to raise funds for “general corporate purposes.”
That move had investors worried about why SVB needed to raise so much money all of a sudden. It also worried depositors, many of whom suddenly wondered if their money was safe and started withdrawing.
On Friday, the California Department of Financial Innovation and Protection said that it is takeover and closure of SVB for deposit protection, designates the Federal Deposit Insurance Corporation as the recipient. The FDIC has established a separate entity where all insured SVB deposits — up to $250,000 per depositor — will be available Monday morning.
The close came after a tumultuous morning for SVB, in which trading in SVB shares was halted after they fell double digits before the market opened. That drop followed a more than 60% drop on Thursday.
The closure marks the biggest bank failure since the 2008 financial crisis and the second largest in US history after Washington Mutual collapses according to FDIC data.
