U.S. Treasury Secretary Steven Mnuchin said backers of Facebook’s cryptocurrency Libra dropped out of the project over concerns that the stablecoin project would not meet regulatory standards.

Speaking on CNBC, Mnuchin said that if Libra wouldn’t meet US money-laundering standards via the Financial Crimes Enforcement Network, it could open them up to enforcement actions.

“I think they realized that they’re not ready, they’re not up to par,” Mnuchin said. “And I assume some of the partners got concerned and dropped out until they meet those standards.”

Mnuchin said he met with Libra representatives on multiple occasions to reiterate his stance on regulatory enforcement of the stablecoin.

Six major Libra backers – Visa, Mastercard, Stripe, eBay and Mercado Pago along with PayPal – withdrew from the Libra Association, a nonprofit organization designed to govern the new cryptocurrency.

On Friday, a Visa spokesperson told CoinDesk:

“We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations.”

The withdrawals were followed by a draft report from the G7 working group on the global stablecoins, evaluating projects like Libra as a potential threat to the international financial stability due to regulatory challenges.

The working group, along with the Financial Stability Board, presented a range of issues circling stablecoins, including data privacy and protection, AML/CFT and KYC compliance, tax evasion, fair competition and market integrity.

U.S. Treasury Secretary Steven Mnuchin image via CoinDesk Archive