Meta confirms shelving Diem project, sale of assets to Silvergate Bank

Meta-backed stablecoin project Diem has officially closed down after confirming the sale of its intellectual property rights and other technology assets to Silvergate Bank.

According to a Silvergate announcement, the company closed the undertaking for $132 million in stock and $50 million in cash, taking the total transaction amount to $182 million. In addition, Silvergate will incur an additional expenditure of $30 million in an effort to integrate the “acquired assets into Silvergate’s existing technology.”

Describing the network in its “pre-launch phase”, Silvergate said it has acquired “development, deployment and operations infrastructure and tools for running a blockchain-based payment network.”

“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,” the Diem Association said in the press release.

The Diem Association had previously partnered with Silvergate in May 2021, making it the exclusive issuer of the Diem USD stablecoin. At the time, the partnership was seen as a move to appease the regulators who had disputes with the project.

However, the association failed to garner a positive response from the regulators despite its multiple efforts, such as rebranding, staff departures, and several high-profile industrialists joining the association. Diem CEO Stuart Levey said:

“With today’s sale, Silvergate will be well-placed to take this vision forward. Over the coming weeks, the Diem Association and its subsidiaries expect to begin the process of winding down, but we look forward to seeing the design choices – and the ideals – of Diem thrive.”

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