It has been announced that the United States government will provide Roblox with $150 million.

The US government has agreed to bail out Roblox with $150m (£125m).

The Federal Reserve has assured Silicon Valley Bank’s depositors that they will be compensated for their losses.

Roblox, with its estimated $3 billion (£2.5 billion) in investments, is one of the largest video game companies in the world.

Kotaku claims that the Federal Reserve will reimburse Roblox for the funds it had previously deposited with the bank, which has since gone out of business.

According to a filing with the Securities and Exchange Commission, on February 28, 2023, Roblox Corporation had $3 billion in cash and securities, of which about 5% was held at Silicon Valley Bank.

So, “this situation will have no impact on the day to day operations of the company,” regardless of the outcome or when it happens.

Most banks only cover deposits up to $250,000 (£200,000) in the event of insolvency.

However, due to a “systematic risk exception” being invoked by the Federal Reserve, the organization will compensate financial institutions for deposits totaling around $175 billion.

Silicon Valley Bank’s failure ranks second among all bank failures.

The name suggests that it catered to people in the tech industry, which the United States government recognizes as vital to the health of the country’s economy.

This crisis is distinct from the one that hit Northern Rock in the UK in 2007.

The failing bank was saved by the British government, and it continued operations until its sale in 2012.

The U.S. government is disbursing these funds to their respective account holders.

Unfortunately, this means that the Silicon Valley Bank will still fail even if depositors get their money back.

Written by Georgina Young on behalf of GLHF.

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