Silvergate, the crypto-focused bank that acquired the assets of Facebook's private digital currency Diem, has written of the $196 million price its paid for the business and laid out plans to shed 40% of its workforce.
Silvergate in February last year confirmed the acquisition of the intellectual property and other technology assets related to running a blockchain-based payment network from Facebook-affilitated Diem Group.
Facebook ditched the ditigal currency project in 2021 in the face on unrelenting political and regulatory pressure. Silvergate was Facebook's original pick for issuing the USD stablecoin. However, the Federal Reserve threatened to ice Silvergate, effectively dealing a final blow to Meta's ambitions.
Silvergate bought out the software assets and planned to originally launch the currency late last year. Market turmoil following the collapse of FTX has put paid to those plans and led to a 'recalibration' of the company's expense base.
This includes the lay off of 200 staff at a total ccost of $12 million in severance payments, and an impairment charge of $196 million related to the buy out of Diem.
"Given the significant changes in the digital asset industry landscape, this charge reflects the company’s belief that the launch of a blockchain-based payment solution by the company is no longer imminent," says the firm in a filing with the SEC. "The company will continue to seek opportunities to realise value from these technology assets."