Home / Business / 4 US lawmakers join Call to Freeze Facebook's Libra project

4 US lawmakers join Call to Freeze Facebook's Libra project

US. Legislators are formally calling on Facebook, in a new letter to the executives of the social media giants, to cease all development of its cryptocurrency Libra.

Democrats from the US House of Representatives wrote an open letter to Facebook on Tuesday calling for a moratorium on the entire development of Libra, while the Financial Services Committee and its affiliated subcommittees hold hearings to determine how it works and what protections it should take Protection of the privacy of users should be applied.

Representative Maxine Waters (D-CA), Chair of the House Financial Services Committee; Carolyn Maloney (D-NY), Chair of the Subcommittee on Investor Protection, Entrepreneurship and Capital Markets; William Lacy Clay (D-MO), Chairman of the Subcommittee on Housing, Community Development and Insurance; Al Green (D-TX), Chairman of the Subcommittee on Supervision and Investigations; and Stephen F. Lynch (D-MA), Chairman of the Task Force on Financial Technology, all signed the letter addressed to Facebook CEO Mark Zuckerberg, COO Sheryl Sandberg and Calibra CEO David Marcus.

Waters has repeatedly called Facebook to halt the development of Libra, although this is the first time she has done so in a formal letter to the company.

The letter describes concerns about the success story of Facebook as well as the potential for the Libra a new global monetary system.

"It looks like these products may be suitable for a whole new global financial system emanating from Switzerland and competing with US monetary policy and the dollar. This raises serious concerns about privacy, trade, national security and monetary policy not only for the over 2 billion users of Facebook, but also for investors, consumers and the entire global economy, "wrote the legislature, adding

" While Facebook has done so In a "White Paper" on these projects, little information has been published about the intent, roles, potential uses and safety of Libra and Caliber, which highlights the massive scale of risks and the lack of clear legal protections show. If products and services such as these are not properly regulated and not adequately monitored, they can present systemic risks that jeopardize US and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have done in the past.

Privacy concerns

The letter highlights current privacy issues on Facebook, including the scandal of Cambridge Analytica A political consulting firm has gained access to data from more than 50 million Facebook users. Facebook already expects a $ 5 billion fine to the Federal Trade Commission for its stake in Cambridge Analytica and reserves a consent decree "to deceive consumers and keep consumer data private".

"Because Facebook is It Already in the hands of over a quarter of the world's population, it is imperative that Facebook and its partners stop implementing plans immediately, until regulators and Congress have the opportunity to investigate these issues and take action "During this moratorium, we will be holding public hearings on the risks and benefits of cryptocurrency-based activities and exploring legal solutions, and if we do not discontinue implementation before we can do so, there is a risk that a new financial system based in Switzerland may become available great to fail. "

The Libra was first unveiled in June, although the social media giant has reportedly been working on it for months, with 27 startup partners including Crypto Exchange Coinbase, and intends to have at least 1

00 members to win for the Libra Association acting as the administration The cryptocurrency will act as the token goes live. Already on 17 July, one day after the start of the Senate Banking Committee hearing, there was a hearing for investigation the scale was set up The G7 formed a task force to investigate the project, and several ministers called on Facebook to provide more details, or stopped the development in another way.

Teaching the Libra

The letter came days after Facebook reportedly briefed Congressional members about the project. [19659002] In a post to the liberal magazine for Politics and Public Order The American Prospect, an anonymous adviser to the House Democratic wrote that the Legislative ve aides met with the Head of Policy of Libra (unnamed, but presumably with Dante Disparte), who set out various aspects of the project, including Facebook's goal of making Libra operational by next year and maintaining its value through a basket of Fiat currencies. [19659002] According to the Prospect article, the Facebook representatives continued to "claim that the 2020 launch target was" extended, "which means conservative, although other participants in the room did not agree with this assessment.

Other topics ranged from the Libra to be regulated – "Facebook said that they assumed that the FTC (Federal Trade Commission) or the CFPB (Consumer Financial Protection Bureau) would regulate the balance" – how exactly that Stablecoin lock would work.

Indeed, the employee wrote: [19659007] "They have continued to sell Libra to provide banking services to 1.7 billion people around the world. When they were asked how they would do that and asked directly if they would find out exactly how a digital currency would be an answer for people who currently have no access to credit, they said, "The short answer is no. " The phrase "The Miracle of Blockchain" was used at one point.

Sensitive Data

The congressional staff present at the press conference also appeared to ask what information Facebook would have when users transferred the scale to WhatsApp or Messenger instant messaging apps that Facebook owns and operates.

"We were sure that … Facebook would not access certain information about [users’] transactions beyond the interest in or use of Libra," wrote the author. "Of course that would be enough information to know a lot more about the users."

Employees were also concerned about how Facebook could prevent the partners of the Governing Council from agreeing with each other, even though the answer was: "The partners were aware of the" reputation risks "that occur in data protection law violations, and so on

"It has also been pointed out that some of the partners are direct competitors, as if this would have ever prevented them from making collusion in the past," wrote the adjutant.

USA House Wing of Capitol Hill via Shutterstock

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