According to a new bankruptcy filing, defunct crypto lender BlockFi has $227 million worth of uninsured funds allocated to a money market mutual fund (MMMF) offered by troubled Silicon Valley Bank (SVB).

SVB — one of the U.S’s largest banks and key partners to venture-backed companies — was shut down by the California Department of Financial Protection and Innovation (DFPI) on March 10, with no specifics offered at the time of the closure.

The move adds to the recent Silvergate bankruptcy carnage which has seen crypto markets tumble since the crypto-friendly bank’s financial woes came to light at the beginning of March.

Few more bank collapses then up only

— sassal.eth (@sassal0x) March 10, 2023

Looking at the ongoing BlockFi bankruptcy case, a March 10 filing indicates that the firm has $227 million worth of capital in an MMMF offered by SVB.

Notably, the filing highlights a balance summary statement from SVB which states that BlockFi’s investment is not a Federal Deposit Insurance Corporation (FDIC) insured deposit, not insured by any federal government agency and “not guaranteed by the bank.”

The FDIC’s federal deposit insurance covers up to $250,000 per depositor, however it does not cover the scope of money market funds.

A money market mutual fund invests in highly liquid near-term instruments such as cash, cash equivalents and high-quality short-term debt instruments, and is regulated by the U.S. Securities and Exchange Commission.

Related: $920B is the number to watch now that crypto’s trillion-dollar total market cap is gone

Investors are issued fund shares in exchange for their capital, and as such, BlockFi’s funds may not be at risk despite SVB’s troubles.

Is this a regular MMF, not affiliated with SVB, custodied at SVB or its securities affiliate? The SVB receivership shouldn’t affect that. The MMF is not FDIC insured, but the shares’ value would depend on what’s in the MMF, not what happens to SVB.

— Matt Waters (@mattwwaters) March 10, 2023

SVB offered several mutual fund investment services, but according to its website it doesn’t appear to have managed any of the funds itself. The firm lists big names such as BlackRock, Morgan Stanley and Western Asset Management as the fund managers.

As such, the risk to BlockFi in this instance is most likely hindered by the fund’s performance, and not anything related to SVB’s financial woes.

One firm that looks to be directly impacted by the SVB closure — and the Silvergate bankruptcy — is USD Coin (USDC) issuers Circle.

According to the company’s latest audit report, as of Jan. 31, $8.6 billion, or roughly 20% of its reserves, were held up in several U.S. financial institutions including SVB, Silvrgate and Bank of New York Mellon.

The exact value held up in SVB and Silvergate is unclear, however Circle issued a statement via Twitter on March 10 noting that the firm and USDC will continue to “operate normally” as it awaits “clarity on how the FDIC receivership of SVB will impact its depositors.”

Silicon Valley Bank is one of six banking partners Circle uses for managing the ~25% portion of USDC reserves held in cash. While we await clarity on how the FDIC receivership of SVB will impact its depositors, Circle & USDC continue to operate normally.https://t.co/NU82jnajjY

— Circle (@circle) March 10, 2023

At the time of writing, USDC has dropped below the $1 peg to sit at $0.98 as per CoinGecko data.