Mark Zuckerberg’s ambition to create his own cryptocurrency is falling under increasing regulatory pressure.
According to a Bloomberg story published on Wednesday morning, the Diem Association, which are in charge of the Diem digital currency, is considering selling its assets in order to restore funds to its investors.
The Diem Association’s spokeswoman declined to comment. An attempt to get a comment from Facebook’s parent company, Meta, went unanswered.
Diem is said to be in talks with investment bankers regarding the next measures, including how to sell its intellectual property, in order to recover whatever is left. According to Bloomberg sources, the corporation is also looking for a new home for the engineers who created this technology.
The talks are reportedly still in the early stages, and Diem is not guaranteed to find a buyer. Even if it did, the report notes is still unclear how the project’s intellectual property, as well as the engineers who produced it, would be valued.
According to a source who spoke to Bloomberg on the condition of anonymity, Meta owns around a third of the company, with the rest held by members of the organization such as Andreessen Horowitz, Union Square Ventures, and Ribbit Capital.
Since it was first unveiled in June 2019, Zuckerberg’s ailing crypto project has been plagued by controversy.
Libra was the name of the cryptocurrency at the time, and it was intended to be a stablecoin, which is a subset of cryptocurrencies whose value is tied to a real-world asset such as a fiat currency like the US dollar or a commodity like gold.
The plan for Zuckerberg’s stablecoin was to create a worldwide currency backed by a basket of major currencies and government debt.
Central bankers and politicians reacted angrily to the concept, fearing that it would promote criminal activities like money laundering and privacy invasion, as well as serve as a powerful competitor to sovereign currencies like the US dollar. Following regulatory pushback, the troubled project shifted its focus to launching many stablecoins, each pegged to a fiat currency, as well as a multicurrency coin.
The cryptocurrency’s aim was eventually whittled down to Diem USD, a US dollar-backed stablecoin.
The project has also had a tangled line of ownership, as well as an exodus of corporate partners and high-ranking executives.
It also had several stakeholders who at one point backed the company, but as Meta’s CEO prepared to go to Capitol Hill to defend the project, significant backers such as Visa, Mastercard, and PayPal dropped out. David Marcus, the director of Meta’s cryptocurrency activities, announced his departure in November of last year.
Source: Bloomberg
