Facebook has been threatened with legal action after rebranding its Libra stablecoin to “Diem,” following objections from a finance startup with the same name.
The social media giant recently announced plans to rename Libra, having settled on Diem as its preferred alternative name. At the time, Facebook said the new name would help the project distance itself from the very public opposition raised by regulators and lawmakers worldwide.
Finance app Diem, unrelated to Facebook, was founded by investor Chris Adelsbach. While he indicated it was not his preferred course of action to sue Facebook, Adelsbach said legal advice suggested he should take steps to protect his company’s brand identity.
“It wouldn’t have taken that much effort for Facebook to find out if there’s another Diem in financial services […] They obviously took the view that ‘we can just crush them, we’re Facebook.’”
Diem CEO Geri Cupi echoed these sentiments, saying the company was “flabbergasted” to discover Facebook had attempted to use its name.
“As a small startup, we are concerned that customer confusion resulting from Libra’s actions will significantly impact our growth.”
The lawsuit is the latest shot over the bows at Facebook since the Libra digital currency project was renamed. Elsewhere this week, German finance minister Olaf Scholz said regulators should not be duped by the change of name.
In a virtual statement to G7 finance ministers, Scholz described the Facebook stablecoin as “a wolf in sheep’s clothing.”
“A wolf in sheep’s clothing is still a wolf. It is clear to me that Germany and Europe cannot and will not accept its entry into the market while the regulatory risks are not adequately addressed. We must do everything possible to make sure the currency monopoly remains in the hands of states.”
See also: CoinGeek Live panel on The Future of Exchanges & Trading in a Tokenized World
New to Bitcoin? Check out CoinGeek’s Bitcoin for Beginners section, the ultimate resource guide to learn more about Bitcoin—as originally envisioned by Satoshi Nakamoto—and blockchain.