When rumors spread on social media that Meta plans to re-enter the stablecoin market in 2026, market attention was inevitably drawn back to that afternoon in June 2018 when Facebook announced the launch of Libra. What happened next is largely known to everyone: Libra continuously compromised for regulatory reasons, even changed its name to Diem, and ultimately had to be sold off completely, severing all ties with Meta.
The entity that bought Libra, later known as Diem, from Meta was a bank called Silvergate. It's unclear how many people still remember this bank, but Silvergate once held a prominent status as an extremely close partner of FTX.
From the super hindsight of 2026, SBF, who has been defined as the pinnacle of crypto investment, must have given his good friend Silvergate plenty of advice, which included the acquisition of Diem. If not for the crash in 2022, this should have been another top-tier investment: a compliant entity with a banking license, paired with a underlying clearing network built by a Silicon Valley giant over three years, enabling all imaginable payments.
In this fire sale with diminished valuations in early 2022, Silvergate went as far as issuing $132 million in new shares to Meta and paid an additional $50 million in cash. In 2022, stablecoins were far from achieving today's level of universality, but Silvergate's CEO Alan Lane was indeed a talent. The whole world knew Diem was sold because regulators wouldn't allow it, yet Alan's obsession with the narrative of "a bank issuing a stablecoin" made him willing to pay $200 million.
Of course, SBF must have been advising him on the side.
Although it's unclear exactly how SBF helped, many details indicate that their relationship was extraordinarily close. In previous interviews, SBF repeatedly praised Silvergate, calling the bank a cornerstone of industry development and stating that without Silvergate, FTX wouldn't have been able to handle USD settlements. Even after the crash, in a class-action lawsuit against Silvergate, allegations were made that the relationship between Silvergate and FTX was "intimate beyond ordinary business."
As everyone knows, exchanging fiat currency on FTX was incredibly smooth and efficient. From this perspective, Silvergate indeed had its exceptional strengths.
After acquiring Diem, the cryptocurrency industry in SBF's eyes had undergone a seismic shift: a vision where a single person uses one currency in a single account to trade all the world's top assets—encompassing trading systems, asset tokenization, and stablecoins—all within his business empire.
If SBF's investment in Anthropic could grow from $500 million to $70 billion, and his investment in SOL could surge from $60 million to $2.1 billion, then there's also reason to believe that the $200 million spent by Silvergate to acquire Facebook's three-year masterpiece could have achieved a positioning-level performance today.
Unfortunately, with the collapse of FTX, Silvergate also suffered immensely. As FTX's primary banking partner, Silvergate faced an unprecedented bank run. To maintain liquidity, it had to liquidate assets at a loss, and the Diem assets purchased for $182 million were 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 crumbled.
It wasn't until 2024, when the liquidation process was fully completed, that Silvergate's name finally disappeared from the regulators' enforcement lists. This bank, with over 30 years of history, paid tens of millions of dollars in fines to the Federal Reserve and the SEC in its final moments and surrendered all its banking licenses, while Diem's code languished unclaimed in the liquidation pool.
