Silvergate bank announced it would begin winding down operations and undergo voluntary liquidation.

On March 8, the bank said it was exploring how it could resolve claims and ensure the continued residual value of its asset while repaying all deposits to clients. The decision was made in light of “recent industry and regulatory developments,” its holdings company Silvergate Capital said.

The announcement came days after the bank announced it would halt the Silvergate Exchange Network (SEN), its real-time settlement service. On March 3, Silvergate submitted an SEC filing stating that it faced inquiries from the U.S. Department of Justice (DOJ) and would file a late 10-K report.

While the bank’s troubles culminated on March 8 with the liquidation announcement, it has struggled for several months. Since the collapse of FTX in November 2022, the bank has seen its stock price depreciate by over 94%.

The most significant 24-hour loss was recorded between March 1 and March 2, when the NASDAQ-listed SI dropped 57%.

The news sent shockwaves through the crypto market, as the U.S. bank served as the backbone for the crypto market, providing financial services to most large crypto companies and exchanges in the country.

Bitcoin dropped to its January low of $19,680 after trading flat at around $21,000 for over a month. The total crypto market cap dipped below $1 trillion, struggling to retain $880 billion at press time.

The crypto fear and greed index has gradually decreased and shows fear. Declining trading volumes and growing exchange withdrawals show investor sentiment is worsening daily.