Facebook’s announcement of plans to design a cryptocurrency and payment system raised immediate red flags for global finance officials, who expressed a barrage of criticism about the security and reliability of a private network.

Diem Networks’ US CEO Stuart Levey said in a statement that the initiative made progress, but “it nevertheless became clear from our dialogue with federal regulators that the project could not move ahead”.

Silvergate is a bank chartered in the state of California that is a go-to for crypto projects, and it put the sale price at US$182 million.

Pressed by regulators’ concerns about a currency managed by a private company, the project was previously entrusted to an independent entity based in Geneva.

After the defection of several major partners such as PayPal, Visa and Mastercard, the organisation scaled back its ambitions, before renaming itself Diem at the end of 2020.