Crypto-heavy bank Silvergate Capital Corp. has doubts about its viability and is reviewing its finances, acknowledging in a regulatory filing Wednesday that it may be “less than well-capitalized.”

Silvergate share prices plunged by 58% on Thursday, pushing the bank’s 12-month stock performance to a more than 90% dip. The La Jolla, California-based bank has suffered since crypto exchange FTX collapsed in November and negatively affected some companies that had ties to it.

The company pointed out in the filing with the Securities and Exchange Commission that its financial results could be affected by the “viability of the Company's digital asset focused business following the substantial volatility in the digital asset industry during the fourth quarter of 2022 and continuing into 2023, including several high profile bankruptcies.”

“As indicated on the Notification of Late Filing Form 12b-25 filed with the Securities and Exchange Commission on March 1st, Silvergate's 10-K filing will be delayed to allow additional time for its independent registered public accounting firm to complete certain audit procedures,” a spokesperson for Silvergate told Banking Dive. “Silvergate is working diligently to file its 10-K as soon as possible and has no further comment at this time.”

Three U.S. senators called out Silvergate and its CEO, Alan Lane, in January, saying the bank failed “miserably” in detecting misuse of funds by FTX and sister company Alameda Research. The Justice Department followed by opening a probe into how much the bank knew about FTX executives’ alleged misdeeds.

Reports surfaced earlier that month that Silvergate turned to the Federal Home Loan Bank of San Francisco for a cash injection following a bank run kicked off by FTX’s collapse. Of the $4.6 billion cash that Silvergate had on hand in January, $4.3 billion came from FHLB, American Banker reported at the time.

In taking the cash injection, Silvergate introduced crypto market risk further into the traditional banking system, the senators said.

Silvergate, in its filing Wednesday, named the DOJ probe and heightened regulatory scrutiny as factors that may affect its financial results.

Alma Angotti, a former SEC and Financial Crimes Enforcement Network regulator who is now a partner at regulatory consulting firm Guidehouse, told Banking Dive she thinks Silvergate's filing “confirms to regulators that they were right to be concerned about banks' ability to manage the volatility of the crypto markets as it affects a bank's customers and deposits.”

Silvergate’s troubles, she noted, are an illustration of the systemic risk posed by digital assets, something President Joe Biden called out in an executive order on the topic last year.

“It appears from the SEC filings that as a result of the concentration risk at Silvergate because of so much of its business was with digital assets companies, it was particularly susceptible to the volatility of the crypto market and problems at FTX,” she said.

The bank’s struggles have led to somewhat of an exodus of business partners. Crypto exchange Coinbase is de-emphasizing its connection to Silvergate, tweeting Thursday that it had de minimis exposure to the bank and that it will facilitate client cash transactions with its other banking partners.

The decision was made “in light of recent developments & out of an abundance of caution,” Coinbase said.

Paxos Trust Co., too, said Thursday it would stop accepting or initiating payments from Silvergate. 

“In light of recent developments with Silvergate Bank, Paxos has discontinued all SEN transfers and wires to our Silvergate account,” the company tweeted Thursday. “Paxos will continue to process all outgoing payments.”

Crypto financial services firm Galaxy Digital, meanwhile, took similar actions “to ensure client and firm assets are secure as part of our vigorous risk-management process,” a spokesperson said in an email to Bloomberg.

The departures come a day after crypto derivatives platform LedgerX announced plans to halt the business it does through Silvergate on Wednesday, according to Bloomberg.

The company will now execute its domestic wire transfers through Signature Bank, according to an email sent to customers and seen by Bloomberg. LedgerX was acquired last year by FTX but remains solvent despite its parent company’s collapse. 

LedgerX did not return Banking Dive’s request for comment. Silvergate declined to comment on customer companies’ decisions to cut ties, as a matter of policy.