In March 2023, soon after the collapse of US-based tech industry-oriented Silicon Valley Bank (SVB), Signature Bank, a leader in crypto currency deposits, met the same fate.
The failure of the Signature Bank has been largely attributed to the contagion effect of the collapse of SVB, leading to an environment of fear and distrust. At the same time as the SVB debacle, another crypto-based Silvergate Bank collapsed due to a drastic fall in customer confidence.
To curtail the crisis, the US Treasury Department and other bank regulators ensured that the depositors would not bear any losses. President Joe Biden also appealed to fellow Americans to ‘breathe easier’ and promised measures to keep the system safe and strengthen the rules of the banks.