Crypto-focused bank Silvergate Capital Corp said on Wednesday it planned to wind down operations and voluntarily liquidate after it was hit with losses following the dramatic collapse of crypto exchange FTX, sending its shares down 35% in after-hours trade. The decision to shutter the bank comes after the company warned last week that it was evaluating its ability to operate as a going concern, disclosing that it had sold additional debt securities this year at a loss and that further losses mean the bank could be “less than well capitalized. " TRENDING STORIES See All Premium Apple iPhone 14 in new yellow colour: Here’s a quick look Premium Russian missiles rain down on cities across Ukraine, of . . . Premium After urination, smoking incidents take place on IndiGo . . . Premium From BBC's role to Tere Naam's direction Timeless contr . . . Also Read: What went wrong at Sam Bankman-Fried's FTX? Bill Ackman has a theory The dire outcome for La Jolla, California-based Silvergate, one of the crypto industry’s favored banks, shows the extent of the impact on the digital asset industry from the downfall of FTX which filed for bankruptcy in November after failing to cover customer withdrawals. In a statement, Silvergate said the decision to wind down its bank was "the best path forward" in light of "recent industry and regulatory developments. " Its wind-down and liquidation plan includes full repayment of deposits, the bank added. Silvergate reported a $1 billion loss for the fourth quarter as investors raced to withdraw more than $8 billion in deposits. Multiple partners of the bank, including high-profile firms like Coinbase Global Inc and Galaxy Digital, severed ties with Silvergate last week. Silvergate has retained Centerview Partners LLC as a financial adviser and Cravath, Swaine & Moore LLP as a legal adviser, the bank said in a statement. MINT PREMIUM See All Premium Top performing midcap stocks of 2023 so far Premium When Parag Parikh's wife stepped up to help him become . . . Premium This Specialty Chemical Company is Taking a Leap in Lit . . . Premium Money lessons this shark learnt from her mother Founded in 1988, Silvergate ventured into crypto in 2013. The bank had also operated a mortgage warehouse business, but announced in December that it would be winding down that division, citing the rising interest rate environment and reduction in mortgage volumes. Last week, Silvergate discontinued the Silvergate Exchange Network, its crypto payments network and one of its most popular offerings. That network enabled round-the-clock transfers between investors and crypto exchanges, unlike traditional bank wires, which can often take days to settle. While risks of contagion are minimal, given that Silvergate has said it will repay depositors and has performing loans, the loss of the Silvergate Exchange Network is disappointing, said Ram Ahluwalia, the chief executive officer of Lumida Wealth, an investment adviser that specializes in digital assets. "It's more of a strategic loss of critical infrastructure for crypto," he said. The Federal Deposit Insurance Corp (FDIC) declined comment on Wednesday when asked about the bank's failure beyond saying that it does not regulate the bank or the holding company. Bloomberg earlier reported the FDIC had been discussing with Silvergate ways to avoid shutdown. Federal prosecutors in Washington are probing the company and its dealings with FTX and trading firm Alameda Research. In January, three U. S. senators asked Silvergate for details about its risk management and FTX. In a statement, the California Department of Financial Protection and Innovation, which supervised Silvergate under a state charter, said it was evaluating the bank's compliance with financial laws, as well as safety and soundness obligations, and was working with its relevant federal counterparts. More than a trillion dollars in value were wiped out from the crypto sector in 2022 with rising interest rates exacerbating worries of an economic downturn . After rapid growth in 2020 and 2021, bitcoin - the most popular digital currency by far - fell more than 60% last year, pressuring the digital assets industry. This story has been published from a wire agency feed without modifications to the text. Know your inner investor Do you have the nerves of steel or do you get insomniac over your investments? Let’s define your investment approach. Take the test Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates. More Less OPEN IN APP.