Silvergate, a California-based bank, announced on Wednesday that there will be some delay in filing its annual report. Silvergate mainly involves in transactions related to cryptocurrency and the current announcements have sent shockwaves across the industry after the FTX failure last year in November. This has resulted in stock prices plunging by more than 10 percent in after-hours trading, reported Coindesk. Investors and customers are equally concerned about this. The bank claimed that it is forced to delay the filing of its 10-K report for the fiscal year 2022. Silvergate has also indicated scrutinising the regulations.


In its filing document, the crypto-friendly bank said that it "is currently analysing certain regulatory and other inquiries and investigations that are pending."


After the company announced it will review its accounts books and conduct an audit, multiple clients have already left and the ones who have not left are planning to leave the company as soon as possible. 


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Silvergate's share price has already suffered a decline of over 50 percent, which is an all-time low.


The bank has further warned it is facing possible inquiries from the regulators and the US Department of Justice. The financial institution said it will face difficulties in surviving "as a going concern" in the near future.


According to a report by Investing.com, the massive sale of its assets has been affecting the company's capital and has left it struggling to repay the maturing loans. The report noted that the bank held advances of about $4.3 billion from the Federal Home Loan Bank in 2022.


On Wednesday, in its filing to the US Securities and Exchanges Commission, Silvergate said, "The Company sold additional debt securities in January and February 2023 and expects to record further losses related to the other-than-temporary impairment on the securities portfolio," as cited in the report by Investing.com.


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The current chaos has caused widespread panic among customers and investors across the crypto industry. Multiple firms such as Coinbase, Galaxy, Circle, Paxos, Cboe Digital Markets, Crypto.com, Bitsamp, Gemini, and Galaxy Digital among others have already said they will stop their transfers and all other related business activities with Silvergate.


Currently, Kraken is the only crypto exchange to not have fully stopped its operations with Silvergate. In fact, on Wednesday, it did end some business dealings with the rival bank Signature (SBNY).


Amid all this, Bitcoin plunged to its lowest levels in comparison to its value during the last two weeks. The token suffered a loss of value by over 6 percent, reported Bloomberg.


Not just that, the global crypto market cap which stood at $1.07 trillion, registering a 24-hour gain of 0.29 percent on Thursday fell to $1.02 trillion global market cap, registering a 24-hour loss of 4.45 percent on Friday early morning. Most popular crypto coins such as Dogecoins, Litecoin, Ripple, and others witnessed losses as there was a visible bloodbath in the idustry due to the prevailing fears because of Silveragte.


Head of trading at digital-asset exchange Independent Reserve John Toro said, "Silvergate is one of the main US dollar banking providers for the crypto industry," reported Bloomberg. In that case, Toro added that any issue at the bank will affect its clients and the market at large.


The current issue of Silveragte is the first contagion effect of the meltdown of the FTX crypto exchange.


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