Facebook is unloading its cryptocurrency unit, Diem Association, to Silvergate Capital for an estimated $200 million, The Wall Street Journal (WSJ) reported Thursday (Jan. 27), citing unnamed sources with insider information.
Now rebranded as Meta Platforms, Facebook launched its blockchain-based payment system and cryptocurrency project in 2019 with the name Libra. The project was later renamed Diem, but neither the blockchain nor the coin ever came to fruition.
Silvergate Capital, a holding company for a small bank in California, serves more than 1,300 bitcoin and blockchain companies as of the third quarter of 2021, according to the company’s website. The bank had previously struck a deal with Diem in May to issue some of the stablecoins, which are a central component of Diem’s business.
Read more: Facebook Eyes Sale of Diem Assets
Problems with regulators prompted the stablecoin deal with Silvergate as part of Diem’s business restructuring.
Meta executive David Marcus who headed the launch of Diem, exited the firm in 2021.
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See more: David Marcus Departs Facebook, Along With the Last Remnant of Libra’s Battered Brand
Co-creator of the initiative, Tomer Barel, is leaving Diem next month. Other members of the founding team also exited the company.
Read more: Another Facebook Executive Plans to Exit
Libra was intended to be a digital coin backed by a cross-section of global currencies, but the project caught the ire of regulators and went back to the drawing board. Rebranded as Diem, the coin was supposed to be pinned to the U.S. dollar but that plan also didn’t meet the approval of Federal Reserve regulators.
Facebook’s digital wallet Novi — formerly called Calibra — was supposed to launch with a Diem token but instead, the stablecoin debuted on Whatsapp with the heavily regulated Paxos Pax Dollar (USDP), which is the seventh-largest stablecoin.
See more: Is Paxos the New Diem?
