The collapse of three major banks, the Silicon Valley Bank, the Silvergate bank, and the Signature bank in the United States shocked the regulatory bodies in the country. Several countries worldwide started reviewing their existing frameworks to protect themselves from any unforeseen potential collapses.
The two banks, Silicon Valley Bank and Signature bank are considered crypto-friendly. Recently, Nellie Liang, the United States Treasury Department’s undersecretary for domestic finance shared his findings on the collapse. While sharing his views on banking sector turmoil, Nellie Lang said that she didn’t think that crypto had any relation to the collapse of banks.
However, when asked if these banks had any indirect relation to digital assets, Lang said that Signature bank was very active in this sector, but she refused to provide further details. A few days back, Federal Deposit Insurance Corporation chairman Martin Gruteberg informed that about one-fifth of Signature bank’s deposits are tied with crypto clients as of December 2022.
In two days-long congressional hearings, the lawmakers avoided the questions related to crypto regulation. The United States lawmakers shifted their attention toward banking sector regulations and the prevention of any future possibilities of a bank collapse.
Many clients have faced problems regarding their funds’ access after the collapse of three major banks, the Silicon Valley Bank, the Silvergate bank, and the Signature bank. For example, Circle, a global fintech company that provides digital currency innovation and open financial infrastructure-related services faced that $3.3 billion in cash deposits remained at Silicon Valley Bank (SIVB).
The exact reason for the collapse has not been identified yet but, surely, stakeholders have faced problems because of the banking sector turmoil. In the absence of these crypto-friendly banks, problems related to funds are stuck. Additionally, no other banks are showing interest in taking these homeless virtual assets customers.