Diem, the cryptocurrency launched by Facebook (now Meta) as 'Libra' in 2019, will be sold to crypto-based bank Silvergate Capital for a reported value of $200 million, in what is seen as a major setback to the corporation's efforts in making crypto accessible to users on its platform.
The release comes after Silvergate Capital had struck another deal with The Diem Foundation, the firm responsible for managing the cryptocurrency Diem, to overtake some of the stablecoins that were less volatile than bitcoins and their like.
Ever since being launched as Libra in 2019, the cryptocurrency offered by Facebook faced a slew of challenges from the authorities. Concerns were raised regarding its potential to be used for fraudulent and terrorist purposes, with data privacy being a question mark as well.
The outlet onboarded well-established names like PayPal Holdings Inc, Visa Inc and Stripe Inc at the start of its operations, which too backed out as the concerns mounted. Zuckerberg, in his bid to defend the project, had deposed before the Congress in 2019 to answer the questions clouding the credibility of the cryptocurrency.
The company had decided to rename the currency in 2020, recruiting the US treasury official Stuart Levy as the CEO. David Marcus, the Meta (earlier Facebook) executive, who spearheaded the launch of the cryptocurrency, quit the firm the same year.
The company is reportedly looking to find new avenues for the engineers who built the project as it nears closure, sources who spoke to Bloomberg said.
(With inputs from Wall Street Journal and CNBC.)
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