<h2 id="header-0">The $196 million that Silvergate paid to Facebook for the private digital currency project Diem has been written down.</h2>
<p>The acquisition of Diem Group, a Facebook-affiliated business, as well as the intellectual property and other technology assets required to run the blockchain-based payment system, was made public by Silvergate in February of last year. In 2021, Facebook gave up on its plan to create a digital currency in the face of constant opposition from political and regulatory agencies.</p>
<h3 id="silvergate-s-ambitions-in-crypto">Silvergate's Ambitions in Crypto</h3>
<p>Facebook's first preference when deciding which company will issue the stablecoin pegged to the US dollar was Silvergate. However, the Federal Reserve issued a warning to Silvergate and threatened to freeze the company, effectively ending Meta's hopes of building a blockchain company.</p>
<p>Silvergate Capital Corp. was obliged to liquidate assets at a severe loss in order to satisfy the approximately $8.1 billion in withdrawals as a result of the failure of the cryptocurrency exchange <a href="https://www.coingabbar.com/en/crypto-currency/ftx-token-ftt-prices-usd" rel="noopener noreferrer nofollow">FTX</a>, which sparked a run on the bank.</p>
<p>The company was cited as saying in a filing with the <a href="https://www.coingabbar.com/en/crypto-currency-news/us-sec-files-a-limited-objection-against-binance-us" rel="noopener noreferrer nofollow">SEC</a>: This charge reflects the company's assessment that the launch of a blockchain-based payment system by the company is no longer imminent given the major changes in the industry landscape for digital assets.</p>
<p>Silvergate added that they would keep looking into fresh ways to capitalize on these technological capabilities. With the goal of initially launching the coin around the end of 2022, the crypto-friendly bank purchased the software assets from Facebook, now Meta.</p>
<h4>Silvergate's Poor Q4 Results</h4>
<p>The fourth quarter of 2022 saw a 68% decline in deposits tied to cryptocurrencies, according to the bank's early publication of quarterly data. The corporation liquidated the debt it had on its balance sheet in order to cover the withdrawals. Along with the buyout of Diem and the 200 layoffs at a cost of $12 million in severance pay, this also includes an impairment charge of $196 million.</p>
<p>Currently, Silvergate (SI) stock is trading at a pre-market valuation of $13.20, a staggering -40% decrease from its most recent traded value of $21.93.</p>

Silvergate Abandons Crypto Acquisition, Writes Off $196 Mn.

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