A once-ambitious but now faltering Facebook-backed digital currency project known as Diem is dead, its assets sold to bank holding company Silvergate Capital.

Silvergate and the Diem Association announced the sale on Tuesday. Meta, which owns Facebook, did not have a comment.

A Faceboook spokesperson, however, pointed to tweets by Stephane Kasriel, head of Meta's cryptocurrency wallet Novi, that said the decision to sell was not made by Meta, but by the Diem Association.

"We hope that the Association's sale of their assets to @silvergatebank will allow the project's vision to live on. Because we still believe in the shared financial inclusion mission," Kasriel wrote.

Diem said it "became clear from our dialogue with federal regulators that the project could not move ahead. As a result, the best path forward was to sell the Diem Group's assets" and the project will wind down in the coming weeks.

It's been clear for a while that Diem, which was first named Libra, was fighting an uphill battle with regulators. Meta has gradually distanced itself from the project.

Last May, the Diem Association, which at the time included Facebook and 25 other companies entered a partnership with Silvergate Capital Corp. to issue a "stablecoin" backed by the U.S. dollar. A stablecoin is a digital currency backed by real-world assets such as national currencies or other commodities.

Facebook announced the Libra project in 2019, at the time envisioning it as a stablecoin based on a basket of national currencies that could serve as a global currency for the unbanked around the world.

But the effort was scaled back considerably amid regulatory and commercial backlash. It underwent a name change in December 2020.