Your didn’t answer my question. If I had an account in SVB, and I put a 100k in it, why would SVB take my 100k and invest it? That was the whole issue with FTX. Investing it whatever asset class, my money shouldn’t have been invested unless I give permission to SVB period.
It’s how literally every bank has worked for all of time. They have to cover interest you are payed for keeping your money at the bank. Where do you think that money comes from? They take the money people deposit, and invest it, either through loans to others, or through other investment vehicles, like treasury bonds in this case. When you put your money in a bank, you are giving them permission to reinvest it somehow. If you just want your money to sit there, your only option is to start stuffing wads of bills under your mattress.
Banks are in the business of lending money to home buyers, etc - how is loaning to the US Govt. criminal?
They have a cash crunch due to interest rate rise, and VC slowdown - bad risk management, but everything is above board.
Startup lines of credit should not happen from deposits, too risky an asset class