'A Reminder We Are Not In Control of Our Own Money': Some Etsy Sellers See Payments Freeze After Silicon Valley Bank Crash
"This issue has impacted an extremely small group of sellers," an Etsy spokesperson said.
By Gabrielle Bienasz •
Key Takeaways
- From TikTok to news outlets, sellers have complained that their money is on hold.
- Etsy said in a community forum that the company "recently experienced a delay in our ability to issue payments to some of our sellers. This was related to the rapid and unexpected collapse of Silicon Valley Bank."
Some Etsy sellers said that they were not able to access deposits from their shops in the wake of the collapse of Silicon Valley Bank, according to Fox Business.
From TikTok to news outlets, sellers have complained that their money is on hold.
On TikTok, one seller said that money she expected to see in her checking account the next day — from the revenue generated by her shop — has been put on hold.
"I have to pay my mortgage in a few days. And I can't. Because they have my money on hold," she said in a video posted Saturday, adding that she got an email saying the issue was due to the collapse of Silicon Valley Bank.
The TikTok user said it's a "reminder that we are not in control of our own money."
The issue has not been resolved as of Monday, she added in a follow-up video.
@amgeee1 @etsy #etsyseller #etsyshop #etsysmallbusiness #etsytiktok ♬ original sound - amgeeee
Sellers said the crisis crept to their doors. Several other users commented on the initial TikTok saying they were experiencing the same thing, including Little Miss Lovely Creations, Blue Piggy Badge Reels, WreathSignDesigns Patricia, and others.
The woman did not add details about the nature of her shop but said she has been a seller on the platform since 2015. She did not respond to Entrepreneur's request for comment.
"This issue has impacted an extremely small group of sellers," an Etsy spokesperson told Fox.
"Approximately 0.5% of our active seller base had their payments delayed on Friday. We are working to pay these sellers today and we've already started processing payments via another partner this morning," the spokesperson added to Fox.
The company says it has about 7.5 million active sellers. Based on the 0.5% number, that would mean about 37,500 sellers were affected.
Last week, Silicon Valley Bank revealed a $1.8 billion loss, sending customers into panic, with founders pulling out money from the institution. The federal government stepped in on Friday and Sunday, taking control of the bank and securing the value of customers' deposits for SVB, along with another entity, Signature Bank. Both reportedly faced bank runs.
Related: Signature Bank Shuts Down After Billion-Dollar Bank Run
In an interconnected financial system, financial difficulties can spread, which is known as contagion. A former official at the Federal Deposit Insurance Corporation (FDIC) said Sunday that there is "no doubt" more banks will collapse, according to POLITICO. Bank stocks, particularly smaller or regional banks, have also been extremely volatile.
It's unclear how specifically the SVB has impacted Etsy. SVB was a favorite among startups and venture capitalists, Elizabeth Yin, general partner at Hustle Fund, previously told Entrepreneur.
SVB also listed e-commerce giant Shopify as a client as well as venture firm Andreessen Horowitz.
Etsy said in a community forum that the company "recently experienced a delay in our ability to issue payments to some of our sellers. This was related to the rapid and unexpected collapse of Silicon Valley Bank," per Insider.
Three other Etsy sellers told NBC News their deposits were delayed. Owen McKinney said the delay was "catastrophic" for his laser engraving shop, as he relies on timely payments from the platform to cover the cost of things like shipping and materials.
