Diem, the ambitious crypto project born out of Meta, is officially over.
Silvergate Capital confirmed Monday that it is officially purchasing the technology, IP and assets from the Diem Association for $132 million in stock and $50 million in cash. Diem Networks CEO Stuart Levey said in a press release that the association will "begin the process of winding down."
"In the United States, a senior regulator informed us that Diem was the best-designed stablecoin project the U.S. government had seen," Levey said in the statement. "Despite giving us positive substantive feedback on the design of the network, it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead."
Silvergate said in a statement that the Diem has been operating in a "pre-launch phase," and the assets acquired in the sale include "development, deployment and operations infrastructure and tools" for running it, as well as "critical" proprietary software.
Diem was founded by Meta in 2019 as Libra, with the aim to create stablecoins backed by fiat currencies. Diem was hit hard with regulatory scrutiny right out of the gate, causing some supporters to drop out. The association had planned to partner with Silvergate Bank, a subsidiary of Silvergate Capital, to issue its digital currency.
Meta introduced a crypto wallet using a different stablecoin last year, in a sign of Diem's fading support.