Less than two days after the rise of the Silicon Valley Bank (SVB) money crisis, the analysis showed that the background of its ultra-fast bankruptcy contributed to the era in which deposits can be easily withdrawn from smartphones anytime, anywhere.

The Wall Street Journal (WSJ) noted in an article titled "SVB Hit by Smartphone Bank Run" on Jan. 12 that Silicon Valley start-ups, the bank's main customers, quickly withdrew large amounts of deposits from their smartphones as soon as they heard about the bank's crisis.

Max Cho, the founder of insurance startup Coverage Cat, was on the bus to attend a founding event in Big Sky, Montana, on Jan. 9 when he saw all his fellow founders tapping their smartphones frantically.

All were to siphon company funds out of SVB Bank.

"There was a bank run actually happening," he recalled.

He also said he followed his colleagues into the SVB banking app and tried to transfer most of the company's balance to another account, but the transfer didn't happen because the money was already tied up.

As such, depositors attempted to withdraw $42 billion (about 55.6 trillion won) by the time financial institutions closed that day, according to the WSJ.

The very next day, on the morning of the 10th, the California Department of Financial Protection and Innovation closed SVB, citing insufficient liquidity and insolvency, and appointed the Federal Deposit Insurance Corporation (FDIC) as the bankruptcy trustee.

It took SVB and its parent SVB Financial Group, which opened in 1983, more than 40 years to emerge as a major financial institution for startups, but it took only 36 hours to collapse, the WSJ noted.

On the eve of its bankruptcy, SVB announced that it had been forced to sell available securities (AFS, bonds and stocks purchased with the intention of selling before maturity) consisting mostly of U.S. Treasuries due to a recent decline in deposits, resulting in a loss of $1.8 billion, which triggered the bank run.

Unlike the 2008 financial crisis, when banks went bankrupt after overinvesting in risky assets such as derivatives, this SVB crisis was not as serious as in 2008 as the value of deposits and assets, which are the core capital of financial institutions, were diverged due to the impact of the central bank's interest rate hikes.

However, industry insiders said that immediately after the company's announcement, SVB's stock price plunged on the stock market on Jan. 9, and the bank run began in earnest when the news reached Slack, an office messenger popular with startups, at 10:30 a.m. Western time.

The WSJ reports that the proliferation of news on social media and the seizure of startup executives, which were not considered factors during the financial crisis, exacerbated the situation.

The news spread lightning fast on social media, with a mix of fact and fiction, and terrified startup officials reacted instantly, opening their smartphone banking app and tapping the numbers a few times to trigger a bank run.

SVB's bad news, coupled with the recent disturbing news in Silicon Valley, such as the liquidation of cryptocurrency bank Silvergate, has sparked a more paroxysmal reaction in the region, the WSJ added.

Kathleen Utech, a partner at venture firm Core Innovation Capital, said: "Companies that didn't have accounts in other banks sent money to the chief executive's personal account or to the bank account of an advising law firm."

Burrun Badwar, chief executive officer of startup Endor Labs, said: "While this seems like an overreaction, it's important to respond quickly because unprofitable startups are forced to rely on these deposits for their company operations."