After a fiery morning on the US Senate floor yesterday, Facebook’s David Marcus (the head of the company’s Libra cryptocurrency project) will face another round of questioning from the US Congress today, July 17th.
But Marcus won’t be the only one answering questions this time–an additional panel of cryptocurrency industry experts will be present, including:
- Chris Brummer, Agnes N. Williams Research Professor Director at the Institute of International Economic Law and the Georgetown University Law Center;
- Katharina Pistor, Professor of Comparative Law at Columbia Law School;
- the Honorable Gary Gensler, Professor of the Practice of Global Economics and Management at MIT Sloan School of Management and Senior Advisor to the Director at MIT Media Lab, & CoDirector of MIT’s [email protected]
- Robert Weisman, President of Public Citizen
- and Meltem Demirors, Chief Strategy Officer at CoinShares.
Yesterday’s hearing focused around Facebook’s handling of data, its role in contributing to the divisive nature of American politics, and the company’s willingness to comply with US regulators and international law.
Marcus insisted again and again that Facebook was working hard to improve its handling of user data, and that the Libra Association had been set up in such a way that the company would have limited control of the network.
However, it appeared that many members of Congress were unsatisfied with Marcus’ responses, and the issue of whether or not Facebook should be trusted with the right to create a currency seems to remain unresolved in the eyes of many lawmakers.
Now, the US Congress, led by Chairwoman Maxine Waters (D-CA), will continue to pose questions on Libra, Facebook, and the cryptocurrency industry as a whole. Finance Magnates is covering the event live; please refresh the page to receive updates on the story.
The Opening Address
“I have serious concerns with Facebook’s plans with Facebook’s plans to create a digital currency and digital wallet, and its efforts to enlist partners that expand its reach, like Mastercard, :ayl, Visa, Uber, Lyft, and Spotify,” Chairwoman Waters began.
“Facebook is apparently trying to create a new global financial system that is intended to rival the US Dollar.”
“This venture is slated to be based in Switzerland, which has a history of being a monetary haven for criminals and shady corporations. Facebook’s plans raise serious privacy, trading, national security, and monetary policy concerns–not only for Facebook’s more than 2 billlion users (who will have immediate access to these products), but also for consumers, investors, and the global economy.”
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“In addition, Facebook has proposed backing Libra tokens with government currencies and government-guaranteed securities, and holding them in the so-called ‘Libra Reserve’ to be governed by Facebook and its partners. Ownership of government assets on such a massive scale without proper oversight threatens to concentrate influence in the hands of a few elites.”
“Ultimately, if Facbeook’s plans come to fruition, the company and its partners wil yield immense economic power that could destabilize currencies and governments.
“Facebook’s proposed entry into financial services is all the more troubling because it is already on a scale similar to Wells Fargo, and demonstrated a pattern of failing to keep consumer data privte on a scale similar to Equifax.
“Facebook remains under a 2011 consent order from the federal trade commission for deceiving consumers and failing to keep consumer data private. In the wake of the Cambridge Analytica scandal, in which Facebook provided 50 million users’ private data to ta political consulting firm, the company reportedly pay a $5 billion fine to the FTC for its privacy failures.
In addition, Facebook has allegedly insecuredly stored user passwords data back to 2012, paid unsuspecting teenagers to download spyware, experienced a hack of nearly 50 million accounts, and experienced a software bug that granted thiird-party access to 6.9 million users’ photos.”
Chairman Waters also pointed to the fact that Facebook has been sued by HUD and other civil rights organizations for failure to comply with the fair housing act.
Like Senator Sherrod Brown did yesterday, Waters also pointed to its role in allowing Russian influence on the American 2016 elections.
Waters also expressed concerns that minority- and women-owned businesses would be excluded from the Libra syste given the lack of diversity in Facebook’s upper ranks.