The Facebook-led cryptocurrency project, Diem, is dismantling itself due to excessive regulatory pressure and is looking for buyers of its assets, Bloomberg reported on Wednesday.
The Diem Association, a third of which is owned by Facebook, has many members and investors, including venture capitals, technology firms and even state funds. Some of its key members are Andreessen Horowitz, Ribbit Capital, Coinbase, Lyft and many more.
Each of the Diem Association members agreed to invest in the project while joining the consortium.
Citing anonymous sources, the report elaborated that the project is already in discussion with investment bankers to find a way to sell its intellectual property and move the engineers to a new project. However, the talks are still in the early stages.
Additionally, it is unclear how potential buyers are going to value the crypto project’s intellectual properties. Some of the sources even stressed that there is no guarantee that the consortium will successfully find a buyer.
End of an Ambitious Project
Facebook and its partners launched the ambitious cryptocurrency project called Libra in mid-2019 and were planning for a launch within a year. However, it faced harsh regulatory scrutiny across the world as authorities were concerned about the impact of a private currency on a massive platform like Facebook.
The CEO of Facebook, Mark Zukerberg, was even forced to testify and defend the project in front of the United States Congress. The consortium then rebranded the project to Diem and made architectural changes in the stablecoins to avoid some of the regulatory tension.
Furthermore, the consortium planned to launch a USD-pegged stablecoin with Silvergate Bank as its partner. However, those efforts were scrapped as banking regulators were not comfortable allowing the lender to be involved in such a project.
