Diem Association, backed by Facebook, confirms it is ‘slowing down’

Deepak Gupta February 1, 2022
Updated 2022/02/01 at 12:57 AM

Diem, the ambitious Facebook-funded cryptocurrency project has collapsed. The Diem Association that it is selling its assets to Silvergate, the bank that had previously partnered with the group, and that it would “begin the process of closing down”. Bloomberg had talks of a sale last week. A spokesperson for the Diem Association claimed at the time that the report contained unspecified “factual errors”.

Now that the sale is official, it marks the end of a more than two-year effort to launch the stablecoin championed by Mark Zuckerberg. Although the Diem Association was a separate organization from Facebook and parent company Meta, much of its funding came from Facebook. “I believe this is something that needs to be built, but I understand that I’m not the ideal messenger for it right now,” Zuckerberg told Congress in a statement. about your cryptocurrency ambitions.

The group formerly known as the Libra Association expected its stablecoin last January. But it faced repeated blockages from lawmakers and regulators around the world, and the bill was delayed, time and time again. Among the main concerns of officials was that Diem could be used for money laundering and other illicit purposes.

In a statement, Diem CEO Stuart Levey blamed US regulators for Diem’s ​​death and defended the organization’s work to minimize risk with “industry-leading controls to protect consumers and fight financial crime.”

“While they gave us substantive positive feedback on the grid project, it was clear in our dialogue with federal regulators that the project could not go forward,” Levey. “As a result, the best way forward was to sell the assets of Diem Group, as we did today for Silvergate.”

It’s unclear what this means for Facebook’s cryptocurrency wallet Novi, which was a “small pilot” last year with stablecoin Pax Dollar. At the time, former Facebook cryptocurrency chief David Marcus said the company remained committed to launching Diem. Marcus left the company a month later. Facebook did not immediately respond to a request for comment.

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