The one who bought Meta's stablecoin Diem back then was SBF's good friend.

Title: The one who bought Meta’s stablecoin Diem back then was SBF’s good friend

Author: Zhouzhou

Source:

Repost: Mars Finance

As rumors of Meta planning to re-enter the stablecoin market in 2026 spread on social media, market attention inevitably shifted back to the afternoon in June 2018 when Facebook announced Libra. The subsequent events are well known: Libra kept compromising to meet regulatory demands, even changing its name to Diem, and ultimately had to be sold off completely, severing ties with Meta.

The entity that bought Libra, now Diem, from Meta was a bank—Silvergate. Not many may remember this bank, but Silvergate once held a prominent position and was a deep partner of FTX.

Looking ahead to 2026, which many see as a post-mortem for the crypto investment bubble, SBF—already considered the industry’s investment ceiling—must have given Silvergate many good ideas, including acquiring Diem. If not for the 2022 crash, this could have been another top-tier investment: a compliant entity holding a banking license, paired with a three-year-developed underlying clearing network built by Silicon Valley giants, connecting all kinds of payment systems you can imagine.

During the early 2022 sell-off, when valuations plummeted, Silvergate didn’t hesitate to issue new shares worth $132 million to Meta and paid an additional $50 million in cash. The stablecoin in 2022 was far from the universal phenomenon it is today, but Silvergate’s CEO Alan Lane was clearly a talented individual. Everyone knew Diem was sold mainly because of regulatory restrictions, and Alan was willing to spend $200 million on the “bank-issued stablecoin” narrative.

Of course, SBF was likely advising him behind the scenes.

While it’s unclear how SBF helped, many details show their close relationship. In previous interviews, SBF repeatedly praised Silvergate, calling it the industry’s foundation; without Silvergate, FTX couldn’t handle dollar acceptance. Even after the collapse, in a collective lawsuit against Silvergate, some accused Silvergate of having a relationship with FTX that went “beyond ordinary business.”

It’s well known that exchanging USD within FTX was incredibly smooth, which shows Silvergate’s significance.

By acquiring Diem, SBF saw the crypto industry undergoing a revolutionary change: a single person trading all top assets worldwide using only one currency in one account—covering the trading system, asset tokenization, and stablecoins—all within his business empire.

If SBF’s investments in Anthropic grew from $500 million to $70 billion, and SOL from $60 million to $2.1 billion, then it’s reasonable to believe that the Facebook project Silvergate spent $200 million on—three years in the making—could also perform at a top-tier level today.

Unfortunately, after the FTX collapse, Silvergate also suffered. As FTX’s main banking partner, Silvergate faced an unprecedented bank run. To maintain liquidity, it had to liquidate assets at a loss, and the $182 million worth of Diem assets purchased was ultimately written down to zero on its balance sheet. With the announcement of voluntary liquidation in March 2023, this cornerstone bank of the crypto industry completely collapsed.

It wasn’t until 2024, after all liquidation work was completed, that Silvergate’s name was removed from regulators’ enforcement lists. This bank, with over 30 years of history, paid millions in fines to the Federal Reserve and SEC in its final moments and surrendered all its banking licenses. Meanwhile, Diem’s code had already fallen into obscurity in the liquidation pool.