 by Meta was killed for political motives.){kind=link}
Gemini co-founder Tyler Winklevoss has backed Meta executive David Marcus’s claim that his crypto project Libra (then Diem) was killed for political motives.
In an X post, Tyler said “Can confirm Gemini worked closely with David and his team at Meta to help launch Libra (fka Diem). We were on the one-yard line when Federal regulators murdered this project. It was all politics, no basis in law.”
The comments, if true, would not be the first in the history where a crypto platform has been snubbed or accused of misconduct by a government regulator.
David Marcus Explains Story Behind Failed Libra Launch
Taking to social media platform X, Meta executive David Marcus explained that the project was in the last line of getting an approval, however was snubbed by Fed and other regulatory for political motives.
David and his team at Meta had developed Libra (then known as Diem), a sophisticated, high-performance blockchain focused on payments, along with a stablecoin.
According to them, the project would have resolved large-scale international payments. The markers of the project had briefed important regulators in Washington, DC, and overseas for months before announcing the project. Eventually, in June 2019, the project was unveiled for people to understand the core concept of the project.
David says “The beginning of two years of relentless work and adjustments to please legislators and regulators came two weeks later when I was asked to testify before the Senate Banking Committee and the House Financial Services Committee.”
He adds, “We had resolved every last regulatory issue pertaining to financial crime, money laundering, consumer protection, reserve management, buffers, and much more by the spring of 2021 (yes, they prodded us at every turn) and were prepared to go live.”
What Went Wrong With Libra Launch?
According to David, some members of the Fed’s Board of Governors supported the gradual rollout of a limited pilot of Libra project that the team had worked on. Finally, Chair Jay Powell was prepared to allow the project to proceed in a restricted manner.
David adds, “According to what I’ve been told, during one of their biweekly meetings, Treasury Secretary Janet Yellen told Jay Powell that letting this project proceed was “political suicide” and that she would not support him if he did. Take this statement with a grain of salt because I wasn’t present when it occurred, but in actuality, this was the moment that Libra was killed.”
A prepared statement was read to each participating bank by the Fed’s general counsel shortly after the Fed arranged calls with them, stating: “We can’t stop you from moving forward and launching, but we are not comfortable with you doing so.”
David believes that “There was no legal or regulatory angle left for the government or regulators to kill the project. It was 100% a political kill—one that was executed through intimidation of captive banking institutions.”