AFP, San Francisco

The Facebook-backed digital currency project Diem announced Monday the winding down and $182-million sale of its technology, capping a years-long initiative that drew significant concern from regulators.

Facebook’s announcement in 2019 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.

“The idea of Facebook doing a cryptocurrency was a bridge too far for regulators,” said analyst Rob Enderle of Enderle Group.

“They have made it clear they don’t trust Facebook with what they are doing now, so sure as heck were not going to let it go into the money business.”

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.” “Over the coming weeks, the Diem Association and its subsidiaries expect to begin the process of winding down,” the association’s statement said.

The technology was bought by Silvergate Capital Corporation in California that is a go-to for crypto projects, and which put the sale price at $182 million.