The share price of cryptocurrency-focused US bank Silvergate plummeted by nearly 50% in early trading on Thursday after fresh revelations about the extent of its exposure to the collapse of crypto exchange FTX raised questions about its ability to survive. On Wednesday, it delayed publication of its annual report and announced a fresh sale of assets to repay debts, while warning that it was assessing “its ability to continue as a going concern” in a filing with the SEC, the US financial markets regulator. Silvergate also hinted at further regulatory scrutiny ahead in the filing, which it said could hit its profitability. It said its business could be adversely affected by “various litigation (including private litigation) and regulatory and other inquiries and investigations”, including by banking regulators, congressional committees and the US Department of Justice. That warning caused a flurry of activity, with major partners including crypto exchange Coinbase dropping Silvergate in a rush to safety. Coinbase, which used Silvergate to handle cash transactions for customers, said that in “light of recent developments and out of an abundance of caution, Coinbase is no longer accepting or initiating payments to or from Silvergate”. “Coinbase has de minimis corporate exposure to Silvergate,” the company added in a tweet. Silvergate’s shares tumbled by nearly 50% to $7 in early trading on the New York stock exchange on Thursday after Coinbase’s announcement, before recovering slightly to $7.60. They had closed at $13.53 the previous day. At the peak of the crypto boom in late 2021, its stock price had hit an all-time high of $219.75. The bank, which is more than 30 years old, shifted its entire business behind serving the cryptocurrency industry in 2013, and grew rapidly alongside the sector. But the collapse of FTX left it exposed, and at the beginning of 2023 it announced plans to sell $5bn worth of assets for cash, booking a loss of almost 20% in the process, in order to deal with “sustained lower deposit levels and to maintain a highly liquid balance sheet”. As cryptocurrency users had withdrawn funds from crypto exchanges, those exchanges had in turn withdrawn currency from their accounts at Silvergate, leaving it dangerously illiquid. It attributed those withdrawals to a “crisis of confidence across the ecosystem”. But even as Silvergate struggles, other parts of the crypto sector are thriving. Bitcoin and Ethereum are both up about 40% from the start of the year, and even after a stumble caused by its relationship to the bank, Coinbase itself is up 76% year to date. But, according to industry newsletter Crypto Global, the rally isn’t leading to a burst of optimism. “Crypto founders and investors, for once, are actually embracing a measured mentality,” said writer Akash Pasricha.