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Fri Mar 10 2023 23:45:07

NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

By: Ina Steiner

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Some Etsy sellers failed to get disbursements on Friday, and in a letter that a seller forwarded to EcommerceBytes, Etsy explained it was due to the Silicon Valley Bank (SVB) debacle.

(See update below.)

Things got rocky for the bank, which lends money to startups and handles banking for tech firms. There was a run on the bank after venture capitalists told their portfolio companies to pull out their cash, and SVB went into FDIC receivership on Friday.

Etsy sent the following letter to sellers who were impacted by its issues with the bank:

"We wanted to let you know that there is a delay with your deposit that was scheduled for today. This delay was caused by the recent developments regarding Silicon Valley Bank, who Etsy uses to facilitate disbursement to some sellers. We are working with our other payment partners to issue your deposit as soon as possible.

"We apologize for any inconvenience or disruption this may have caused. We know that you count on us to help run your business and we understand how important it is for you to receive your funds when you need them. Please know that our teams are working hard to resolve this issue and send you your funds as quickly as possible.

"No further action is needed from you at this time. Please feel free to reach out to our Help Center 24/7 with any questions you might have."

However, sellers discussing the issue on the Etsy discussion boards and elsewhere were concerned at the lack of details and some said they were halting activity on the site.

"I will be taking orders through this page only as the bank that is used by Etsy has been seized," one seller posted on Facebook. "I am out a lot of money as I have sent all orders even though I have not yet been paid out by Etsy, and if this isn't fixed, I will never see that money. If you would like to place an order, message me through here and I will get back with you ASAP!"

EcommerceBytes couldn't find any announcement on Etsy, and we reached out to the company on Friday evening. It had not filed any notice with the SEC as of that time, indicating its exposure could be immaterial. But for sellers facing cashflow issues with bills to pay, today's disbursement delay is material to their businesses.

Update 3/11/2023: Sellers will have to wait days to get their disbursements. An Etsy spokesperson provided us with the following statement, which it also posted on its website:

"At Etsy, supporting our sellers is our highest priority, and we understand how important it is for these small businesses to be able to receive their funds when they need them. We recently experienced a delay in issuing payments to some sellers related to the unexpected collapse of Silicon Valley Bank. Our teams have been working around the clock to implement a solution, and we expect to pay sellers via our other payment partners within the next several business days."

(Note that's business days.)

Update 3/12/2023: Relief! Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer, per the FDIC website.

Update 3/13/2023: See the latest news as of Monday morning: "Etsy Starts Unclogging Payout Jam That Impacted .05% of Active Sellers."

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Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: Ina

Sat Mar 11 19:03:16 2023

Post above updated to add Etsy statement released on Saturday - note that it expects to pay sellers within the next several *business* days.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: pace306 This user has validated their user name.

Sat Mar 11 19:46:49 2023

1) TOOL

@The End

Silicon Valley Bank is well known!

16th largest bank in the US

Been in business for 40 years


And Lehman Brothers? They were MUCH bigger then SVB and they still went under - quickly

2) This is EXACTLY why NO SELLER should trust ANY OF THESE CROOKED PLATFORMS with their funds.

Its NOT for the platform/site to decide what happens to YOUR money. But sadly, people "LET" them and this is what happens.

And please DONT say - "well it cant happen to eBay" ....... d@mn well straight it could !


Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: Bill

Sun Mar 12 00:36:46 2023

Silvergate Capital Bank has also gone into receivership and has closed it's doors.
SVB was the 17th biggest bank in the US and Slivergate is the 18th.
They invested their money in Treasury bonds, not bills, and as such they were on the books at the price they paid.. They had been in trouble for a while and were paying out high interest on their money market accounts to provide their liquidity so they can get through the economic crisis that is starting to develop. Well they screwed up big time.
Their are also many bigger banks that are invested in treasury bonds that they are loosing money on because of the increase the Fed is doing to fight the inflation that the leaders have caused because of their massive spending on social programs and the capping off of the wells that are one of the biggest contributors to our country's GDP since we do not manufacture here like we did in the old days.
I myself transferred all of our money out of Pay Pal and I have several different bank accounts for my cash.
If this problem spreads the FED will have to print more money and interest rates will go up even more.

I hope that does not happen.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: toolguy

Sun Mar 12 10:09:39 2023

Sounds like Etsy's going to rob Peter to pay Paul.

What could go wrong?

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: DingDong This user has validated their user name.

Sun Mar 12 11:32:37 2023

There was a notice that:

Yellen: No federal bailout for collapsed Silicon Valley Bank

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: iheartjacksparrow

Sun Mar 12 11:44:43 2023

SVB employees received their annual bonuses just hours before the bank collapsed.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: toolguy

Sun Mar 12 11:53:38 2023

@ iheartjacksparrow

The FDIC has offered employees 1 1/2 times pay for the next 45 days if they stay on board while they sort this out.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: RhinestoneMom This user has validated their user name.

Sun Mar 12 18:10:06 2023

Normally I'm the first to jump on the ''Etsy is so stupid'' bandwagon because, well, most of the time they are. This situation is a whole lot more complex though. My husband is IT director for a medium sized company affected by this. This company has both brick and mortar stores and online sales. He, the CFO and others have been working non-stop since Friday morning trying to switch things around just to be able to function. Part of the issue here is that there are legal agreements in place with SVB - some of which are for exclusivity to SVB -  so now attorneys have to be involved to figure out what legal obligations the company still has to SVB now they are under the Feds. Doesn't seem really smart now but hindsight is always 20/20!

Another thing is we don't know who Etsy uses for merchant processing. My husband's company uses SVB for that too. When things went to heck on Friday, everything suspended - both outgoing and incoming funds. They were not able to process any credit card customer orders/purchases which were still coming in at the normal pace. Decisions were made and my husband was able to reroute all of that through another processor by late Friday night which was no small feat considering that the POS units in each store had to be reprogrammed. And then where does the money go once it's processed? Right now all the funds have to be held until Monday when the bank opens again. There is so much that is unknown until Monday. So from this point of view I'm sympathetic to Etsy's situation. I know for a fact that their people have been working non-stop trying to get as much figured out - and implemented - as they can. As a seller on Etsy, it totally sucks that my funds are going to be held up. I'm just glad that I don't rely on that income for things like food.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: toolguy

Sun Mar 12 20:30:53 2023

I wonder if eBay has a back up plan if Adyen has problems?

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: The End

Sun Mar 12 21:44:45 2023

Dear Pace306,
If they were "well known",
I would have heard of them.
They were a legend in their own mind.
I don't want to get sucked down the rabbit hole of commenting on someone's comment.
It's just rude.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: iheartjacksparrow

Sun Mar 12 22:09:01 2023

The Federal Reserve has announced that all those with money in SVB will get their money back. The FDIC today held an auction for SVB's assets, but no buyer was found. Depositors will have access to their money on Monday. Apparently Signature Bank is in big trouble.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: Ina

Sun Mar 12 22:10:40 2023

Update Sunday evening: Depositors will have access to all of their money starting Monday, March 13. No losses associated with the resolution of Silicon Valley Bank will be borne by the taxpayer, per the FDIC website.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: Shanna This user has validated their user name.

Sun Mar 12 22:15:37 2023

I wonder if that Etsy spokesperson will get their paycheck on time, or does Etsy keep their payroll accounts at SVB?

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: Bill

Mon Mar 13 00:01:08 2023

Another bank just collapsed.
Signature Bank was taken over by the FDIC today and is the 29th biggest bank and is the 3rd largest bank to ever collapse.
They had a lot of banks on the east coast with deposits totaling 110 billion dollars. They were headquartered in New York.  

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: Gumball This user has validated their user name.

Mon Mar 13 01:05:40 2023

My opinion is someone in the Venture Capitalist group decided to cause havoc with American banks and pulled their money out and alerted other venture groups to pull their money. Probably someone who has a grudge against US. This is why the Federal Government should limit foreign investments and venture capitalist groups in this country. Collapsing banks causes a huge mess for those affected and hurts the economy in general which affects us all.  

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: pace306 This user has validated their user name.

Mon Mar 13 08:33:39 2023

@theend

those were TOOLS words not mine

It SEEMS he meant/thought that big companies are "too big to fail"

MY point was that larger companies have gone OOB/bankrupt and so SVBs issues are a warning to other banks - not to go down that same path.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

by: AddyUp This user has validated their user name.

Mon Mar 13 09:26:44 2023

Over here the UK arm of SVB has been taken over by HSBC and customers can access their accounts as normal.

Apparently it's the same here in that they mainly specialise in lending to tech companies.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: iheartjacksparrow

Mon Mar 13 10:45:49 2023

Now First Republic Bank, Western Alliance, and PacWest Bancorp are in trouble.

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: toolguy

Mon Mar 13 11:04:38 2023

@TheEnd

"They were a legend in their own mind."

Anybody who is anybody in the "tech" industry knows who Silicon Valley Bank is.

They've been catering to that industry since the early 80's

Perminate Link for NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank   NEW: Etsy Delays Seller Payouts due to Run on Silicon Valley Bank

This user has validated their user name. by: toolguy

Mon Mar 13 11:10:43 2023

@Ina

Yellen said no burden to the tax payer.

How can this be?

I Googled: Who funds the FDIC

Is FDIC taxpayer funded?
The FDIC is funded by FDIC-insured institutions, not taxpayers, and FDIC deposit insurance is backed by the full faith and credit of the United States Government. FDIC deposit insurance coverage depends on the type of banking products you have. Depositors do not need to apply for FDIC insurance.

Yet right there is says "backed by the full faith of the United States Government" Last I knew We The People are the US Government

It's all just Yellen double talk. . . .Nothing is free in this world, someone's going to have to foot the bill.

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