Congress sends cease and desist plea to Facebook over crypto plans

Congress sends cease and desist plea to Facebook over crypto plans

Congressional lawmakers have called on Facebook to cease work on its proposed cryptocurrency, citing the social media giant's recent travails over privacy issues as a glaring threat to the functioning of the world economy.

In a letter to Facebook chief Mark Zuckerberg, democrats on the House Financial Services Committee demanded an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency and digital wallet, Libra and Calibra..

“Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action,” the lawmakers wrote. “During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”

While Facebook has published a 'white paper' on these projects, the scant information provided about the intent, roles, potential use, and security of Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections, the letter contends.

Investors and consumers transacting in Libra may be exposed to serious privacy and national security concerns, cyber security risks, and trading risks, says the Committee.

"These risks are even more glaring in light of Facebook’s troubled past, where it did not always keep its users’ information safe," the letter continues. "For example, Cambridge Analytica, a political consulting firm hired by the 2016 Trump campaign, had access to more than 50 million Facebook users’ private data which it used to influence voting behavior. As a result, Facebook expects to pay fines up to $5 billion to the Federal Trade Commission (FTC), and remains under a consent order from FTC for deceiving consumers and failing to keep consumer data private. It has also recently been sued by both civil rights groups as well as the US Department of Housing and Urban Development for violating fair housing laws on its advertising platform and through its ad delivery algorithms."

The chair of the Committee, Maxine Waters has announced plans to convene a full Committee hearing entitled, 'Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System' on 17 July.

Comments: (3)

A Finextra member
A Finextra member 03 July, 2019, 13:36Be the first to give this comment the thumbs up 0 likes

What could possibly go wrong with consumers handing over their personal financial information to a company that has repeatedly demonstrated an inability and/or unwillingness to protect their members' privacy.

Nicolas Saubié
Nicolas Saubié - NEOSURF CARDS - Paris 04 July, 2019, 09:44Be the first to give this comment the thumbs up 0 likes

LOL I agree with you Jim, however the real threat is to the banks which might loose many, many customers.

Bala Pillai
Bala Pillai - Indonesia.Net - Kuala Lunpur 09 July, 2019, 02:55Be the first to give this comment the thumbs up 0 likes Making Currency Current (Reducing the oxymoroness of currency [from “current”]): Do not throw the baby out with the bathwater Libra is first and foremost a thrust towards making currency as current as it is for birds, bees abd trees. Towards having currency virtue signal currentness. Q: How many hours per day must a bird work to have a decent life? A: 1-3 hours Q: Why do so many humans have tough lives working 10 hour shifts? A: Because human currency is not anywhere as current, as currency is for birds. Q: Has currency always been uncurrent for humans? A: No. For example it was not, in the villages that came together to 1) create what are called Hindu numerals 2) that created the first version of blockchain, bigpage (Tamil: பேரேடு) that preceded the building of the first dam in the world in 300 AD — Kallanai on the Kaveri River, Tamilnadu,India. Still functional. Q: What do we have to do to make currency current again? A: Go back to first principles. Firmly grasp and make happen the first and last principle of currency — that it is the trustfulness of individuals in a community, solidified. Paper money sinks to zero if it loses the trust of villagers if it becomes uncurrent.The shift of sovereignity from villages to an unaccountable central institution has waylaid the currentness. For more, kindly google #current_currency and #uncurrent_currency.