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Circle’s Potential Loss of $198 Million: An Analysis of FDIC Recovery Process and Interest Income

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On March 11, according to the analysis of encryption analyst Adam Cochran, according to the recovery process of FDIC (Federal Deposit Insurance Corporation of …

Circles Potential Loss of $198 Million: An Analysis of FDIC Recovery Process and Interest Income

On March 11, according to the analysis of encryption analyst Adam Cochran, according to the recovery process of FDIC (Federal Deposit Insurance Corporation of the United States) and referring to the collapse of Southern Pacific Bank in 2003, FDIC will first pay a one-time dividend (about 62%), and pay 94% of the capital at the time of final payment. If Silicon Valley Bank is similar to this situation, the maximum loss of Circle is $198 million of $3.3 billion, which is easily covered by Circle’s interest income.

Analyst: According to the recovery process of FDIC, Circle’s losses are easily covered by interest income

Analysis based on this information:


The message provides an analysis by encryption analyst Adam Cochran on the potential loss that Circle, a leading digital currency company, could face under the Federal Deposit Insurance Corporation (FDIC) recovery process. Cochran refers to the collapse of Southern Pacific Bank in 2003 as a comparable situation to Silicon Valley Bank, which holds the majority of Circle’s assets. Based on FDIC’s recovery process, Circle could face a maximum loss of $198 million, which is easily covered by its interest income.

FDIC is a United States government agency that provides insurance for bank deposits to protect customers from bank failures. In the event of bank failures, FDIC has a recovery process that involves compensating customers for the loss of their funds. This process involves two payments: a one-time dividend payment and a final capital payment. According to Cochran’s analysis, FDIC will first pay a one-time dividend of about 62% of the deposit, and then pay a final capital payment of 94% of the deposit.

Cochran’s analysis suggests that Circle’s potential loss under FDIC’s recovery process would be manageable, as the company’s interest income would easily cover the loss. Circle is a fast-growing digital currency company that provides a platform for buying, selling, and storing cryptocurrencies. The company holds most of its assets in Silicon Valley Bank, which is insured by FDIC. If Silicon Valley Bank were to fail, Circle could still recover most of its deposits through FDIC’s recovery process.

In conclusion, the analysis of Cochran provides a reassurance that Circle’s potential loss under FDIC’s recovery process is not as significant as it may seem. Circle’s interest income could cover the maximum loss of $198 million, and FDIC’s recovery process would ensure the return of most of its deposits. However, this message also highlights the importance of understanding the risks associated with digital currency investments and the need to diversify assets.

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