The parent company of Silvergate Bank, known to many in the space a major crypto bank, has announced plans to “wind down operations” and liquidate the bank.

U.S. Bankruptcy Judge Michael B. Kaplan said Silvergate had to return $9,850,000 deposited by BlockFi, according to a court filing on Friday.  

Coinbase announced on Thursday that it is no longer accepting or initiating any payments to or from the crypto-friendly bank Silvergate. Recently, Silvergate delayed its 2022 fiscal year 10-K filing with the SEC, citing the need for more time to complete the filing. Following the delay, the financial institution JPMorgan downgraded the company’s stock from “neutral” to “underweight.”

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Cryptocurrency exchange Coinbase announced that it had terminated its partnership with Silvergate Bank as its U.S. dollar banking partner, citing the ongoing investigation. In an announcement tweet, the exchange said:

Silvergate Capital Corporation, the parent company of Silvergate Bank, delayed its annual 10-K report filing with the U.S. Securities and Exchange Commission on Wednesday, telling the agency it “needs additional time” to allow an independent accounting firm to complete certain audit procedures.

At present, in-trouble crypto exchange, Binance is facing regulatory heat. It is alleged that Binance transferred $400 million from its Binance.US account to a company reportedly tied to CEO Changpeng Zhao.

Silvergate Bank and its CEO Alan Lane have been accused of “aiding and abetting” a “multibillion-dollar fraudulent scheme orchestrated by Sam Bankman-Fried (SBF)” and two of his entities, FTX and Alameda Research, in a newly proposed class action lawsuit.

Recent data shows that Silvergate Bank, a crypto-friendly financial institution, has become the most shorted stock in the United States, according to the Financial Industry Regulatory Authority. On Tuesday, Silvergate’s stock saw a rise after it was discovered that Citadel Securities holds a 5.5% stake in the bank, according to a Schedule 13G filing with the Securities and Exchange Commission (SEC).

A member of Silvergate’s board of directors resigned Thursday, the crypto-friendly bank disclosed in a recent filing with the Securities and Exchange Commission (SEC).