Crypto bank Silvergate Capital (SI) has cut 40% of its staff, or about 200 employees, the company said in a filing with the U.S. Securities and Exchange Commission on Thursday, news that sent its shares down 46% to $11.76.

The bank has also halted its plans to launch a digital currency and has written off the $196 million related to its acquisition of the technology and assets of Diem Association from Facebook parent Meta Platforms (META). Diem, formerly called Libra, was Facebook's attempt to create a stablecoin, which is a cryptocurrency pegged to the U.S. dollar or other stable asset.

Diem had said last February that Silvergate would be buying its assets and technology.

“In response to the rapid changes in the digital asset industry during the fourth quarter, we took commensurate steps to ensure that we were maintaining cash liquidity in order to satisfy potential deposit outflows, and we currently maintain a cash position in excess of our digital asset-related deposits,” Silvergate CEO Alan Lane said in a press release.

Macro headwinds and contagion from the collapse of crypto firms like Celsius Network and FTX led to a significant downturn in the industry last year. Some firms filed for bankruptcy, largely because of the poor performances of bitcoin (BTC) and ether (ETH), the two largest cryptocurrencies by market cap. Both fell by over 60% in 2022.

Still, the Silvergate Exchange Network continued to operate with an average daily trading volume of $1.3 billion in the fourth quarter, up from $1.2 billion in the third quarter.

The bank, however, witnessed an outflow of $8.1 billion in digital-asset deposits during the fourth quarter. To counter the outflows, Silvergate sold $5.2 billion of debt securities, incurring a loss of $718 million.

Deposits from customers declined to $3.8 billion in the fourth quarter from $11.9 billion in the third quarter.

"Digital asset industry gone under big shift. Significant overleverage has led to several high-profile bankruptcies and sparked crisis of confidence across industry. Many industry participants have shifted to risk-off," Lane said.

Read more: Silvergate Shares Drop to Fresh 2-Year Low Amid FTX Testimony

UPDATE (Jan. 5, 12:38 UTC): Updates share price. Adds context throughout.

UPDATE (Jan. 5, 15:42 UTC): Updates share price in headline and article. Adds quote from Silvergate CEO Alan Lane.