Key Takeaways
- Diem Association sells its crypto infrastructure reportedly for $200M
- The ticket was purchased by a holding company of the crypto-focused Silvergate bank
Facebook’s brief venture into crypto may be coming to an close.
According to an article published in the Wall Street Journal, Wednesday, Diem Association’s blockchain and cryptocurrency infrastructure will be sold for $200 million to a Californian banking institution.
Blockworks did not receive a response from Facebook, now Meta Platforms Inc.
Bloomberg reports that Silvergate Capital Corp. had previously agreed to a deal to issue stablecoins for Diem, but the Federal Reserve had blocked this effort.
Silvergate Capital, a holding for its crypto-focused banking company that provides financial infrastructure and service to participants in digital assets, is an investment firm.
The move was seen as a method to return capital back to its member investors. According to reports, Meta Platforms Inc., the parent company of Facebook, owns about a third. The two other thirds are owned by a group of association members.
From the outset, the Diem project formerly known as Libra was derided and railed against over its plans to introduce a stablecoin — a crypto asset generally pegged to a commodity or fiat currency — to billions of users worldwide.
Meta revealed the ambitious project way back in June of 2019, much to regulators’ and politicians’ dismay. The association, which was formed with payments giants PayPal Stripe and Visa as well as a list of other large companies in the world, included PayPal, Stripe and Visa.
A month later, Mark Zuckerberg’s testimony before Congress was a source of concern in Washington. He had to explain how the initiative would not undermine global finance. The project’s development was halted after funding cuts, the Meta-owned Novi wallet, and regulatory pressure.
David Marcus, the man who was in charge of Libra and the development Novi from the start, left Facebook last December, citing the need to pursue personal projects.
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