And your bank is bankrupt 💸

Refactored

Hey readers, Welcome to Refactored! Today we are covering SVB’s effect on regional banks, privacy incident at mental healthcare startup and memes.

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The Main Thing
You should know

SVB Ripple Effect

What: The major concern with SVB closing down was 97% of depositors will not be able to access their money.

Over the weekend the Treasury, FDIC and the Federal Reserve reached an agreement, allowing all depositors to withdraw their money.

Here’s how it’ll work:

1. Deposit Insurance Fund: Banks are required by law to pay for insurance on deposits and FDIC manages that insurance money via Deposit Insurance Fund.

2. FDIC will use the Fund: to pay out all the depositors in one go, and recoup SVB assets over time.

3. Shortfall: FDIC will charge 'bank' little extra to cover up the costs if there is a shortfall

FDIC expects to recover 99% of the money, and the shortfall is covered by banks. So in technical terms, this isn't a bailout and tax-payers aren't taking a hit.

But as we all know, banks aren't here for social service. Almost every tax paying American has a bank account, and the banks will likely pass down the cost to them in one way or the other.

Ripple Effect: New York based Signature Bank was closed down on Sunday, the second massive bank failure in three days! FDIC will protect the depositors similar to SVB.

First Republic bank, 14th largest bank with $212B in assets is down ~60% as of today morning!

Meanwhile, Bitcoin is having its moment and up 10% 🤑 

Tech Roundup
Stay Informed

Cerebral: Mental health startup Cerebral shared personal sensitive data of more than 3.1M US users with Google, Meta and TikTok. Going one step beyond than 'just' the name, address and phone numbers, Cerebral even exposed the mental health self-assessment of patients!

Privacy failures of health startups isn’t new - Read our coverage on GoodRx for more.

NASA: Four Astronauts returned back to Earth after 157 days in orbit aboard the International Space Station! SpaceX's Dragon capsule was used to shuttle to and from earth and is the only human rated US spacecraft in service.

Around the Internet
Juicy quick bites

• 🧲 Super Conductor: Scientists claim room-temperature super-conductivity.

• 🏡 Texas Utopia: Elon Musk wants to build a Town, 35 miles from Austin.

• 🤑 $40,000/mo: Cost of Twitter's new API for just 0.3% of all tweets.

• 🤖 GPT-4: Microsoft is planning to release new version of AI model this week

Misc