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naraburns  nihil supernum  1yr ago (text post)   6181 thread views

Small-Scale Question Sunday for March 12, 2023

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

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Curious about something that I didn't find answer for in all SVB-adjacent reporting. If FDIC takes over a bank, as I understand they'd eventually sell all the assets, return all the deposits, pay off all the creditors, as much as possible, etc. However, there could be the case that the ultimate value of the assets is over the value of liabilities (I guess not a common case for a failed bank, but it could happen). What happens with the rest of the money then? Does FDIC take it for itself? Is it distributed to former shareholders? Something else happens?

A bit of a tangent, but somewhat related.

Remember Mt Gox? The famous bitcoin trading site that had a big chunk of its coins stolen.

As the the company went through Japanese bankruptcy courts, a years long process, it's bitcoin reservers were sold to pay off depositors. But depositors were owed the JPY value of the BTC accounts at the time the site had closed off. The value of BTC had skyrocketed. As a result, even after penalties and fees, there are millions of dollars leftover.

The courts have been trying to give the money to the owner of Mt Gox, but he doesn't want to accept it. He's afraid of the Yakuza and other organized crime outfits who got lost BTC in the bankruptcy.

So I'd assume it would end up going to shareholders.

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