(Reuters) -Cryptocurrency-focused lender Silvergate Capital warned it was delaying its annual report and said it was evaluating its ability to operate as a going concern on Wednesday, sending its shares down by more than a quarter in after-hours trading.

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

The company said it would be unable to meet an extended March 16 deadline for submitting its annual report. It also said, in a filing to the Securities and Exchange Commission, that it had sold additional debt securities to repay debts this year and that further losses mean the bank could be “less than well capitalized”.

Silvergate “is evaluating the impact that these subsequent events have on its ability to continue as a going concern,” it said. “The Company is currently in the process of re-evaluating its businesses and strategies in light of the business and regulatory challenges it currently faces.”

Shares fell nearly 32% to $9.24 in after-hours trade, and suggest the stock could open at a three-year low on Thursday.

Silvergate’s stock has plummeted about 96% from its record high close in November 2021.

Federal prosecutors in Washington are probing the La Jolla, Calif.-based Silvergate 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.

Wayne Huang, co-founder and CEO of XREX, a global USD-crypto exchange headquartered in Taipei, said the issues highlighted how interconnected and vulnerable crypto banking had become.

“This accentuates the importance of having a robust banking network for crypto firms, instead of the over-reliance on just several banks,” he said. Wider digital asset markets were relatively calm, though bitcoin made little advance despite a drop in the U.S. dollar, last buying $23,457.

“From what we gather, most crypto companies have had to already find banking elsewhere, hence we believe the damage is likely already done in terms of implications to the wider crypto market,” said Matthew Dibb, chief investment officer at cryptocurrency asset manager Astronaut Capital.

Global cryptocurrency exchange Binance had secret access to an account at Silvergate belonging to its purportedly independent U.S. partner and transferred large sums of money from the account to a trading firm managed by Binance CEO Changpeng Zhao, Reuters reported last month.

(Reporting by Noel Randewich; Additional reporting by Rae Wee and Tom Westbrook in Singapore. Editing by Lincoln Feast.)