THE American government has agreed to give Roblox $150million (£125million) in a bank bailout.
Following the collapse of the Silicon Valley Bank, the Federal Reserve has promised to pay out all of its customers.
Roblox is one of the world’s biggest gaming companies, with estimated investments of around $3billion (£2.5billion).
According to a report by Kotaku, the Federal Reserve will pay Roblox the money it had saved with the now-defunct bank.
An SEC filing revealed: “Of Roblox Corporation’s $3billion of cash and securities balance as of February 28, 2023, approximately 5% is held at Silicon Valley Bank.
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“Thus, regardless of the ultimate outcome and the timing, this situation will have no impact on the day to day operations of the company.”
Usually, account owners are only insured up to $250k (£200k) if the bank collapses.
However, the Federal Reserve invoked a ‘systematic risk exception’ that means it will pay out around $175billion in lost bank deposits.
The collapse of Silicon Valley Bank is the second largest bank collapse of all time.
As the name suggests, it was focused on serving members of the tech community, which the American government sees as important to the country’s economy.
This crisis is different to the situation that happened with Northern Rock in the UK back in 2007.
At that time, the British Government bailed out the collapsing bank that continued trading until it was sold in 2012.
In this case, the American Government is paying the money out to the companies and individuals that hold the accounts.
This means that the Silicon Valley Bank will still collapse, despite individuals receiving back their deposited money.
Written by Georgina Young on behalf of GLHF.
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