Troubled cryptocurrency financial services provider Silvergate Bank will shut down and its assets will be liquidated following months of ongoing drama in the market following the collapse of crypto exchange FTX Trading Ltd. in November.

Parent company Silvergate Capital Corp. made the announcement today, saying that it intends to wind down operations and voluntarily liquidate the bank in accordance with applicable regulatory processes. Silvergate said that in light of recent industry and regulatory developments, it believes that “an orderly wind-down of bank operations and a voluntary liquidation of the Bank is the best path forward.”

The bank’s wind-down and liquidation plan includes the full payment of all deposits, with Silvergate adding that it’s considering how to resolve claims and preserve the residual value of its assets, including its proprietary technology and tax assets.

The bank’s collapse is a direct result of its exposure to FTX and the alleged fraud perpetuated by former Chief Executive Sam Bankman-Fried. FTX was a major customer of Silvergate Bank and its collapse in November has led to this point, since even a reasonably well-capitalized bank can only take so much pressure.

Although the trouble at Silvergate can be traced back to Bankman-Fried, the first sign of serious trouble came in January when the company announced it was laying off 40% of its workforce “in order to account for the economic realities facing the business and industry today.”

At the time, Silvergate also provided a financial update, saying that deposits from asset customers declined to $3.8 billion at the end of the fourth quarter, down $7.3 billion. As of Dec. 31, about $150 million of Silvergate’s deposits were from customers that have filed for bankruptcy. More notably, Silvergate posted a loss of $1 billion in the quarter because of its exposure to FTX.

“In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows and we currently maintain a cash position in excess of our digital asset related deposits,” CEO Alan Lane explained at the time.

Forward to March 2 and arguably the final nail in the Silvergate Bank coffin came when Coinbase Global Inc. and Paxos Trust Co. LLC announced they were breaking ties with the bank on concerns about its financial position. Coinbase cited a recent investigation and a delayed U.S. Securities and Exchange Commission filing as driving its decision.

Centerview Partners LLC is acting as financial adviser to Silvergate on the bank’s shutdown, with Cravath, Swaine & Moore LLP acting as legal adviser and Strategic Risk Associates providing transition project management assistance.

Image: Silvergate