INSUBCONTINENT EXCLUSIVE:
Mark Zuckerberg once defended Diem, a crypto initiative backed by Meta, in front of United States lawmakers.The controversial
Association, a cryptocurrency initiative once known as Libra backed by Meta Platforms Inc., is weighing a sale of its assets as a way to
return capital to its investor members, according to people familiar with the matter
Diem is in discussions with investment bankers about how best to sell its intellectual property and find a new home for the engineers who
developed the technology, cashing out whatever value remains in its once-ambitious Diem coin venture, said the people, asking not to be
-- stablecoins -- aimed at revolutionizing global financial services, they did so in collaboration with dozens of other companies
But the consortium wasn't enough to protect the project from worldwide regulatory scrutiny
After Zuckerberg was called to testify, some partners abandoned the project and it changed its name to Diem
Diem's ambitions scaled back and its founder, David Marcus, left Meta last year
The association struck an arrangement with Silvergate Capital Corp
to issue Diem, but resistance from the United States Federal Reserve dealt the effort a final blow, the people said.Diem said in May that
an affiliate of the firm, Silvergate Bank, was to be the issuer of the Diem USD stablecoin, a type of cryptocurrency pegged to the United
States dollar that's typically used to buy and sell other crypto
After a lengthy back-and-forth between the Diem advocates and regulators, Fed officials finally told Silvergate last summer that the agency
bank's regulator, Silvergate was left unable to issue the new asset with confidence the Fed wouldn't crack down, and so the Diem effort
had no coin.A Fed spokesman declined to comment on the agency's talks with the Diem advocates
The Diem Association declined to comment
or the engineers that helped develop it
Discussions are early, the people cautioned, and there's no guarantee Diem will find a buyer.Meta owns about a third of the venture and
the rest of it is owned members of the association, according to one of the people
Association members, which include venture capital firms and technology companies, agreed to invest and pay to join when the group was
capital firms such as Andreessen Horowitz, Union Square Ventures, Ribbit Capital, and Thrive Capital as well as Singapore state-owned
investor Temasek Holdings Pte
Its website also lists crypto-focused companies like Coinbase Global Inc., and others such as ride-hailing company Uber Technologies Inc
and commerce platform Shopify Inc.In November, the federal watchdogs finally made it clearer what they were after
Stablecoin issuers should be regulated banks if the tokens are to be used as a means of buying and selling things, the President's Working
Group on Financial Markets said in a report
The group of regulators said they feared what might happen if a vast network of a tech company's users suddenly began transacting in a new
