After the tug of war between regulators and the project’s parent company Meta Platforms, the latter lost it, and now crypto payment platform will be acquired by Silvergate
- Social Media giant Meta, formerly known as Facebook, planned to launch its crypto platform and also stablecoin for it
- The project was proposed in 2019 and planned to launch in 2020 but was stuck in regulatory issues
- Since then, the plan was in the middle, but now it’s confirmed that the project, still in its developing state, will not launch
Diem Association, formerly named Libra, a highly aspired crypto project funded by American social media giant Meta Platforms, is finally shut down. And now, the group behind the project is selling its assets to Silvergate Capital Corporation.
Diem and Silvergate had a partnership long back when the bank sought potential in the project. And the bank was hoping that the project would present monetization opportunities in the crypto space.
The announcement by the Deim Association of selling its assets
On Monday, an announcement regarding the selling of Diem in Silvergate came out from both. Diem associations statement was that they would begin the winding down process of the project and its subsidiaries in upcoming weeks. By selling the assets and then with the capital, the group will pay back the investors in the project.
Diem Association projects have seen a lot of ups and downs since its announcement. At the time of the announcement, it was named Libra, which later changed due to controversies. And later on, the project was still facing various allegations and restrictions from authorities and regulators.
Despite the assurance behind the project, CEO Stuart Levey openly said that the project would help in consumer protection and fighting financial crimes. Levey said that federal regulators didn’t even give them substantive feedback on the working and design of the network. But after the dialogue with regulators, it was clear that they could not move ahead with the project.
Regulators even said criminals and money launderers could use the project to do unethical practices and affect the sovereignty of monetary policies of the Country.
The announcement by Silvergate Bank of purchasing projects assets
Later on the same day, the bank, in a press release, announced about acquiring Diem’s assets of development, deployment and operational tools. The acquisition will also include tools needed for running a payment network based on blockchain. This tool helps in the exchange of assets and other payment applications.
Bank $50 million in cash and additionally issues $132 million in the common share of Class A to purchase assets. At present, the share price of Silvergate was 13.4%, hiked in a day and trading at $107.74 per share.
Silvergate will use the assets and tools for developing its infrastructure; the Bank has plans to develop a regulated and highly scalable stablecoin backed by the dollar. By the end of the year, it hopes to launch such a stablecoin.