A group of Democrats on the House Financial Services Committee is calling on Facebook to halt its plan to develop a cryptocurrency-based payments platform.
The lawmakers, whose panel will hold a hearing later this month on Facebook’s Project Libra, wrote a letter to company executives Tuesday expressing concerns with the cryptocurrency’s security and oversight while stressing the need to protect users’ privacy and thwart hackers.
“If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past,” the lawmakers wrote.
“Investors and consumers transacting in Libra may be exposed to serious privacy and national security concerns, cyber security risks, and trading risks. Those using Facebook’s digital wallet – storing potentially trillions of dollars without depository insurance – also may become unique targets for hackers.”
The letter urges Facebook and its partners to “immediately agree to a moratorium on any movement forward on Libra.” The letter was addressed to Facebook CEO Mark ZuckerbergMark Elliot ZuckerbergHillicon Valley: Facebook facility evacuated after sarin scare | Warren, Jayapal question FCC over industry influence | 2020 Dems take on election security | Border Patrol to investigate Facebook group with racist, sexist posts GOP senator presses Instagram, Facebook over alleged bias in content recommendations Facebook should do more on voter suppression, hateful content, civil rights audit says MORE, COO Sheryl Sandberg and Project Libra chief David Marcus.
House Financial Services Committee Chair Maxine WatersMaxine Moore WatersOn The Money: Senate passes .5B border bill, setting up fight with House | 2020 Democrats spar over socialism before first debate | Ex-Im deal in peril amid Dem backlash Export-Import Bank deal in peril amid Democratic backlash Hillicon Valley: Senate bill would force companies to disclose value of user data | Waters to hold hearing on Facebook cryptocurrency | GOP divided on election security bills | US tracking Russian, Iranian social media campaigns MORE (D-Calif.) and Democratic Reps. Carolyn MaloneyCarolyn Bosher MaloneyUnglamorous rules change helps a big bill pass Cracks form in Democratic dam against impeachment US women’s soccer team reignites equal pay push MORE (N.Y.), Lacy ClayWilliam (Lacy) Lacy ClayHarris hops past Biden in early race for Black Caucus support Congress needs to continue fighting the opioid epidemic Criticism punctuates Nadler’s leadership of Trump probe MORE (Mo.), Al GreenAlexander (Al) N. GreenHarris hops past Biden in early race for Black Caucus support Buttigieg defends experience: ‘Anybody of any age can do a good job’ Palmer’s Paris agreement bashing lacks policy basis MORE (Texas) and Stephen LynchStephen Francis LynchAnticipation builds for final Supreme Court rulings House Oversight Committee requests information on reported Trump plan to send TSA employees to border Lawmakers blast Wells Fargo chief over response to scandals MORE (Mass.) all signed the letter.
The Democrats said their concerns were only heightened by Facebook’s past privacy scandals, highlighting the harvesting of data from more than 50 million users from the political consulting firm Cambridge Analytica during the 2016 presidential election.
“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,” they wrote.
Besides the House panel, the Senate Banking Committee will also hold a hearing on Project Libra later this month.
Facebook’s Calibra subsidiary first unveiled its plans for the cryptocurrency last month that would be operated by the Swiss nonprofit Libra Association and separate from the social media platform. Facebook, along with Uber, Mastercard, Spotify, Vodafone, Coinbase and Women’s World Banking, will be one of dozens of companies with investing and holding voting power in the project.
Executives were quick to assure users that their privacy would be protected.
“Your social data on Facebook is kept separate from Calibra data,” Kevin Weil, Calibra’s vice president of product, told The Washington Post. “This is not about improving ad targeting. We’re trying to draw a bright red line.”
Libra’s blockchain technology will allow users to hold addresses that are separate from their real-world identity. The cryptocurrency will also be backed by government currencies like the dollar to help ensure its stability.
Libra, should it ultimately be implemented, will be available in Facebook’s messaging services, Messenger and WhatsApp, as well as a separate app.