By Phil Kwok, CEO & Founder of EasyA

It has been precisely two weeks since the collapse of Silicon Valley Bank and the subsequent buyout of the UK arm of its operations by HSBC. After the initial frantic panic and reassurances by the UK Government that deposits were now secure, the dust has somewhat settled. 

But now that a financial disaster, with echoes of the great financial crisis, has been averted for now, where does that leave Web3 tech startups and the banking sector at large?

Before SVB’s collapse, critics of Web3 relished in the sudden downfall of Web3 goliaths like Sam Bankman-Fried’s FTX empire. As thousands of people working in Web3 lost their jobs, people looked on with a certain degree of satisfaction to see Web3 startups that had grown uber fast go down.

As SVB collapsed, however, traditional tech companies now felt what it was like to have a trusted organisation fall with their own livelihoods at stake. People began to question how such an apparently legitimate institution could have crumbled so quickly, much like those in Web3 looked for answers in the rubble of FTX. But while there was no saviour for FTX, SVB’s depositors have been saved. So, has the tech world learned any lessons? Or will SVB pass as a near-miss with nothing lost?


The new understanding of Web3 and its offering

Lessons have certainly been learned. Everyone in tech now understands why Web3 exists – to guarantee genuine, full ownership. With banks, the money you think you hold in your account isn’t actually held by you – it’s held by the bank. However, Web3 enables users to own their assets with no intermediaries. In short, Web3 gives every user genuine ownership and control of what they own. 

SVB’s collapse arose from depositors withdrawing funds amid warnings about the bank’s health. Those who wanted to transfer their money out on Thursday and Friday were met with the nightmare scenario of being unable to do so. Instead, the bank did not listen to their instructions, preventing further withdrawals. All of this reinforces the lack of ownership suffered by people who had their cash tied up with traditional banks. For those who custodied their own assets in Web3, they never batted an eyelid.


Web3’s ties to non-Web3 technology

The collapse of SVB is not without issues from a Web3 perspective. Web3 and its processes remain tightly linked to non-Web3 tech, particularly stablecoins. For example, DAI, a stablecoin designed to preserve a precise ratio with the U.S. dollar, depegged amid SVB’s collapse. This was not uncommon throughout the rest of the market, with other stablecoins suffering similarly. Most of the stablecoins have now repegged, but it is a timely reminder that Web3 is still intertwined with the non-Web3 elements. 


Lack of trust in centralised entities 

Final lesson? People trust centralised entities less than ever before. With SVB’s collapse representing America’s 16th largest bank and the largest bank collapse since 2008, the warning signs remain for the rest of the banking industry. Amid the recent news of Credit Suisse being rescued, current trust in centralised entities and the banking system could still decrease significantly. People may start to take control of their finances individually, moving their assets into cryptocurrencies and other investment methods – areas they can personally control.  


So, what do all these factors mean for Web3 startups/funding? 

Short-term, this spells more caution for the tech world in general. But long-term, this is a boon for Web3. Since the crypto crash of 2022, people have openly questioned why Web3 exists, and prominent tech leaders have claimed Web3 was just a fad, with AI being the actual future. After SVB, however, Web3’s core tenets of decentralisation and true ownership ring truer than ever. 

The argument that people must truly be able to own the money they have is stronger than ever now. Entrusting it to the hands of a few banks is becoming less of an attractive option. As the traditional banking sector continues to lick its wounds, Web3 startups will be stronger than ever, raise more than ever, and more people will trust Web3 than ever before. In short: The end of SVB is the start of the next Web3 bull run.


Phil Kwok, CEO & Co-Founder

Active in blockchain since 2013, Phil is a serial hackathon winner and world-leading expert on blockchain. Prior to founding EasyA, Phil founded two ground-breaking marketplace startups and worked at top New York law firm Sullivan & Cromwell. He was one of the youngest people ever to pass the New York Bar and consistently ranked top of his year as a scholar at Cambridge University.

man smiling at camera
Phil Kwok


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