Silvergate Capital is expressing doubts about its ability to say in business. The holding company that provides financial services to crypto firms issued a going concern warning.

Cryptocurrencies fell on the news and two cryptocurrency exchanges dropped Silvergate as their banking partner. Bitcoin and Ethereum are both down more than 3% in the past 24 hours.

Silvergate said it is in the process of reevaluating its businesses and strategies in light of current business and regulatory challenges. As a result, the company is delaying its annual report with the Securities and Exchange Commission (SEC). The bank said it would be unable to meet an extended March 16 SEC deadline and is in the process of selling additional debt securities to pay the bills in 2023. 

"The Registrant requires additional time to perform analysis, record journal entries related to subsequent events and to complete management’s evaluation of internal controls over financial reporting," Silvergate said in a regulatory filing.

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The crypto bank reported a $1 billion loss for the fourth quarter as investors raced to withdraw deposits in the wake of FTX's bankruptcy, suggesting the firm's troubles highlight the fragility of confidence in digital assets.

Silvergate, one of the most influential banks in the digital asset industry, has drawn the ire of lawmakers in the United States over its dealings with FTX and Alameda.

In January, a bipartisan group of U.S. senators sent a letter to Silvergate, asking for details of the bank's risk management practices and alleging its due diligence processes "failed miserably."

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Coinbase Global and Galaxy Digital on Thursday dropped Silvergate Capital Corp as their banking partner after the lender's latest filing raised questions about its ability to stay in business.

Coinbase and Galaxy Digital also said they had minimal exposure to Silvergate, which has been plunged into a crisis stemming from a bank run after the collapse of major crypto exchange FTX in November spooked investors.

Stablecoin issuers Paxos and Circle, Cboe's digital asset exchange, crypto exchange Gemini and European crypto exchange Bitstamp also suspended their partnerships with Silvergate.

J.P. Morgan downgraded its rating on Silvergate's stock to "underweight" from "neutral" and withdrew its price target, saying the sale of additional securities suggests that the firm is facing continued liquidity challenges.

"We now see elevated risk of further downside in SI shares given the outstanding risk that the bank is unable to remain a going concern," J.P. Morgan analysts said in a research note.

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Reuters contributed to this report.

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