Meta CEO Mark Zuckerberg is reportedly pulling the plug on Diem, the social network’s yet-to-launch cryptocurrency, as regulatory resistance to the digital money mounts.
The Diem Association, which oversees the digital currency, is considering liquidating its assets in order to return capital to investors, according to Bloomberg. Negotiations are reportedly still in the preliminary stages, with the association discussing how to sell its intellectual property and find new homes for the engineers who developed Diem.
Meta, which until recently was known as Facebook, owns about a third of the project, according to Bloomberg’s unnamed sources, with the remainder in the hands of a variety of investors including Uber, Shopify and Union Square Ventures.
A Diem spokesperson declined to comment on the reported sale. Meta didn’t respond to a request for comment.
Diem, which was launched in May 2019 under the name Libra, has a troubled history. Five founding partners, including Visa, Mastercard, PayPal and eBay,shortly after its launch.
Meta, called Facebook at the time, had planned to link the launch of its Novi cryptocurrency wallet to Diem’s rollout, but Novi went live in October 2021 without the currency. David Marcus, who led Novi since May 2018,to pursue personal projects.
In May 2021, the Diem Association announced a partnership with Silvergate Capital Corp that would see its affiliate, Silvergate Bank, issue Diem stablecoin. The association also said it was moving operations from Switzerland to the US.
The US Federal Reserve’s refusal to assure Silvergate it wouldn’t have issues with the plan was the final nail in the coffin, according to Bloomberg’s sources.
Meta also faced political pushback. In October, a group of Democratic senators that included Sherrod Brown of Ohio and Elizabeth Warren of Massachusetts, penned an open letter urging Zuckerberg to end Diem. The group said Meta had “repeatedly” displayed indifference to the harms caused by its products.