Diem responds to allegations from Senate Democrats

Diem has penned a effect to the radical of Senators that called retired Facebook, asking the societal networking institution to shelve its Novi and Diem offerings

On Tuesday, a radical of senators wrote to Facebook CEO Mark Zuckerberg asking that his institution abandons plans for its integer wallet, Novi. The wallet is intended to yet custody the Diem token, though it is scheduled to motorboat with the PAX dollar token for its aviator program.

Diem has since responded to the letter, saying that the lawmakers had misread the narration betwixt itself and Facebook. Diem explained that it is not the aforesaid entity arsenic Facebook, and it is alternatively an relation with members from some Novi and Facebook. The task clarified that Novi’s scheduled aviator programme had nary narration to the Diem token arsenic it would categorically usage the Paxos stablecoin.

“Diem is not Facebook. We are an autarkic organisation, and Facebook’s Novi is conscionable 1 of much than 2 twelve members of the Diem Association. Novi’s aviator with Paxos is unrelated to Diem,” a conception of the connection read.

The effect to the US senators besides reviewed the senators’ protestation that Diem had failed to amusement however it would forestall amerciable fiscal transactions and transgression connected the platform. Diem Networks cited that it has been positively reviewed by the Treasury Department’s Financial Crimes Enforcement Network, reflecting Diem’s fiscal transgression compliance framework. Diem besides held the sentiment that it has among the champion controls successful the industry; the prohibition of anonymous transactions to non-hosted wallets until their fiscal risks are managed.

“Beyond fiscal transgression compliance, we engaged extensively with an interagency regulatory squad astir the plan of the project. As portion of that review, we made adjustments to bespeak feedback we received, and we were informed by a elder regulator that Diem is the best-designed stablecoin task that the US authorities had seen,” Diem expounded connected its position.

Diem additionally disclosed that erstwhile it yet launches successful the market, it would person considered the feedback from regulators worldwide. The task promised to connection a outgo strategy that would beryllium unafraid for users and protected from fiscal crime.

Since Facebook projected it successful 2017, the Diem unchangeable coin has been facing changeless scrutiny. This is not the archetypal clip US senators are questioning the project. The blockchain-based outgo strategy was antecedently criticised successful 2019 by Senators Brian Shatz and Sherrod Brown, who felt that Facebook engaged successful fiscal activities without subscribing to the applicable regulatory requirements.

The senators had besides complained that the task exposed consumers to precocious levels of risk. Once again, the information posed by the task to users and the fiscal strategy is the superior interest expressed by the 5 Democratic senators. The quintet is asking Facebook to instrumentality to its erstwhile commitments not to motorboat a integer currency nether improper regulatory circumstances. The senators support that the societal networking institution is not to beryllium trusted successful executing a outgo system, fto unsocial a integer currency.