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Cryptocurrency exchange Coinbase Global Inc COIN-Q on Thursday cut financial ties with Silvergate Capital Corp SI-N and said it had minimal exposure to the lender, whose latest filing raised questions about its ability to stay in business.

Coinbase said it would partner with other financial institutions to facilitate cash transactions for clients who had parked funds with the exchange, and that it had stopped accepting or initiating payments to or from Silvergate.

Silvergate’s shares plunged to a record-low of $6.80 following the announcement, while Coinbase’s shares fell nearly 10 per cent to $58.04.

“This does not bode well for the whole crypto market, as Silvergate is a major player in the space,” said Marcus Sotiriou, analyst at digital asset broker GlobalBlock.

“The result of this remains to be seen, but we could potentially see a contagion from crypto businesses who use Silvergate Bank being impacted,” Sotiriou added.

The crypto exchange’s decision comes as Silvergate seeks to chart a course out of the liquidity crisis it was plunged into after FTX’s bankruptcy last year that spurred its customers into withdrawing billions of dollars in deposits.

On Wednesday, Silvergate delayed its annual report and said it had sold additional debt securities – investments that can include bonds and notes – to repay debts this year and was evaluating the impact of these events on “its ability to continue as a going concern.”

“The bank to some degree has become a lightning rod victim of circumstances given industry news flow over the last few months,” Canaccord Genuity analysts wrote in a note after the disclosure.

The bank has also become a target for short sellers. Short interest in Silvergate stock is estimated to be as much as 22.6 million shares, or 82 per cent of the float, making it the most shorted stock in the United States in terms of percentage of float, according to data from analytics firm S3 Partners.

One of the most influential banks in the digital asset industry, Silvergate was founded in 1988 and ventured into crypto in 2013.

Besides Coinbase, Kraken is also one of its top clients.