Securities Litigation

Requiescat Diem. Launched with great fanfare three years ago as Libra, the Facebook/Meta-led blockchain stablecoin effort now called Diem announced January 31 that it will shut down and sell its assets to Silvergate Capital Corporation.

Libra was launched June 18, 2019, with support by many key finance and payments industry participants. Libra aspired to become a worldwide blockchain-based stablecoin payment system. Initially envisioned as a multi-currency stablecoin, Libra was to be backed by a basket of reserve assets including fiat currencies and short-term government notes. The effort was governed by its supporting members, through the Libra Association, based out of Switzerland. Later, the Association determined to issue Coins in single or multi-currency denominations. Read the Association’s White Paper v.2 (4/20) here.

As with other cryptocurrencies, however, Libra ran into significant regulatory headwinds. Initial association members included major banks, credit cards, payment processors, but they soon started dropping out. Libra later rebranded as Diem, perhaps presaging its primary sponsor, Facebook’s, rebranding as Meta.

The press release announcing Diem’s death is here:

Thomas K. Potter, III (tpotter@burr.com) is a partner in the Securities Litigation Practice Group at Burr & Forman LLP. He is licensed in Tennessee, Texas, and Louisiana. Tom has over 35 years of experience representing financial institutions in litigation, regulatory, and compliance matters.