Silvergate is buying assets of Zuckerberg’s crypto venture

abdelaziz Fathi

Crypto-friendly bank Silvergate Capital today announced it was buying the assets of the Diem Association, which runs the Facebook-backed cryptocurrency venture for $182 million.


The assets acquired by the US-listed bank include infrastructure and tools of development and operations related to running the blockchain-based payment network. To fund the deal, Silvergate issued more than 1.22 million common shares to Diem Association, which is funded by Facebook but operates independently, plus $50 million in cash.

As part of integrating the acquired assets into Silvergate’s existing technology, the local three-branch lender expects to incur approximately $30 million of additional costs in 2022.

Alan Lane, Chief Executive Officer of Silvergate, comments: “In the digital asset industry, money moves across the globe around the clock. Through conversations with our customers, we identified a need for a U.S. dollar-backed stablecoin that is regulated and highly scalable to further enable them to move money without barriers. As previously stated on our Q4 2021 earnings call, it remains our intention to satisfy that need by launching a stablecoin in 2022, enabled by the assets we acquired today and our existing technology.”

“I’m tremendously proud of the efforts of our members, partners and teams who have worked tirelessly to develop the Diem Payment Network with robust controls to protect consumers and combat financial crime. We have confidence in Silvergate’s ability to take Diem’s technology forward and transform the future of payments,” added Diem chief executive Stuart Levey.

This is not the first interaction between Diem and the crypto-focused, California-based bank. Earlier in May, Silvergate teamed up with Zuckerberg’s crypto project in a partnership that assigned the crypto friendly lender as the exclusive issuer of the social media giant’s stablecoin, aka Diem USD. Formerly known as Libra project, the Diem should have been the first cryptocurrency issued on Facebook’s payment system, which has been in limbo since 2019.

Head of Facebook’s crypto unit Novi quits

Silvergate, which is trading under the ticker (NYSE: $SI), allows its customers to obtain US dollar loans collateralized by their bitcoin holdings at some crypto exchanges that Silvergate is currently serving.

In the absence of major institutional attention, Silvergate Bank provides tailored financial services to businesses that are directly or indirectly dealing with cryptocurrency and blockchain-related services.

David Marcus, the former head of Facebook’s crypto unit Novi and its efforts to launch a digital currency, left the company in December.

Other than Zuckerberg himself, Marcus had been the face of Facebook’s wallet and its long-delayed stablecoin since the company announced the two projects in 2019. Since then, he led efforts to spur support for Facebook’s cryptocurrency endeavors through introducing tremendous changes. Libra cryptocurrency rebranded as Diem, while Calibra wallet has become Novi.

Marcus has recently stated that Facebook was getting closer to launching its Novi wallet, a move that would expose 2.9 billion users to digital currencies, possibly for the first time. It would then compete in a market dominated by the likes of Coinbase and Gemini, which operate crypto wallets for their traders.

Facebook Inc. and its partners were redesigning the proposed cryptocurrency to ensure that diem is not being built to compete with sovereign currencies or interfere with monetary policy. The changes were apparently an effort to woo reluctant global regulators and rebuild momentum for the plan.

Read this next

Retail FX

AvaTrade seals sponsorship deal with F1’s Aston Martin team

Dublin-based forex broker AvaTrade today announced that it has concluded a sponsorship deal with Formula One’s Aston Martin Cognizant team that entails sponsorship rights and other marketing benefits.

Executive Moves

M4Markets onboards Invaxa CEO Marios Antoniou as COO

Seychelles-regulated brokerage firm M4Markets has appointed Marios Antoniou, who has a colorful career within the foreign exchange industry, in the capacity of its Chief Operations Officer.

Digital Assets

GK8 now allows clients to control their digital assets as they would their fiat

“As the institutional market is increasingly turning to self custody, our policy engine empowers them to automate transactions, approvals, and even crucial workflows, while providing the highest degree of security, consistency, governance and control.”

Digital Assets

Retail CBDCs in the UK: “Welcomed” by CryptoUK and R3, but “Dystopian” for ETC Group

“At this stage, we judge it likely that the digital pound will be needed in the future. It is too early to decide whether to introduce the digital pound, but we are convinced preparatory work is justified”, said the BoE and HM Treasury.

Institutional FX

Centroid taps Iress API to provide retail brokers with real-time market data

“It has always been a challenge to have an efficient, elegant solution for market data and order execution for retail brokers, but with Iress we have found absolutely the right partner to add to our client offering.”

Digital Assets

Ramp launches FCA-approved off-ramp product, onboards Brave, Trust Wallet, Ledger

“To obtain and maintain our FCA registration, we must meet and operate within their strict anti-money laundering and counter-terrorist financing standards. This is a huge achievement for us, as compliance is a cornerstone of our business and what we stand for.”

Institutional FX

State Street launches FIX API for Fund Connect ETF platform

“Expanding from proprietary APIs to the FIX industry standard will bring us closer to our goal of 100% digital interactions. This is another example of innovations we’ve brought to our operating model as we celebrate 30 years of servicing ETFs since the launch of SPY.”

Industry News

HollyWally opens office in Portugal to bring B2B2C wallet-as-a-service platform to Europe

“We looked at a number of centers for startups throughout Europe and were attracted straight away to Lisbon. There is great Government support and enthusiasm for startups, it’s well positioned between our Asian and US offices, it’s a cost-effective city in which to base a fintech and it’s a beautiful place.”

Retail FX

Eightcap integrates Acuity’s economic calendar for trade ideas on MT4 or MT5

“By incorporating Acuity’s cutting-edge AI technology into our platform, we are able to offer our clients a powerful new tool that will help them stay ahead of the markets. We are committed to providing an extensive range of tools and educational resources that will enhance our clients’ trading experience and allow them to trade smarter.”