The Santa Clara-headquartered bank was shuttered by the California Department of Financial Protection and Innovation, which appointed the Federal Deposit Insurance Corporation (FDIC) as the receiver.
This is the biggest bank collapse in the US since the 2008 failure of Washington Mutual during the global financial crisis.
Shares of the bank were halted on Friday after they tumbled 66 per cent in premarket trading.
The bank is the first FDIC-insured bank to fail in more than two years, the last being Almena State Bank in October 2020.
Silicon Valley Bank had approximately $209bn in total assets and about $175.4bn in total deposits, as of 31 December 2022. Washington Mutual has total assets of $307bn when it was shuttered on 25 September 2008, 10 days after Lehman Brothers failed.
The main office and all branches of Silicon Valley Bank will reopen on March 13 and all insured depositors will have full access to their insured deposits no later than Monday morning, according to a statement.
The startup-focused lender had 17 branches in California and Massachusetts, the FDIC said.
With additional reporting by Reuters