Two US Senators have said Facebook’s Libra will fuel the growth of criminal activities across the globe, a concluding remark that resulted in big supporters of the digital currency backing out overnight.
In a well-worded letter of caution sent to Stripe Inc., Visa, and Mastercard, duly signed by Brian Schatz and Sherrod Brown representing Hawai’i and Ohio respectively, the lawmakers highlighted the ills associated with Facebook, the social media giant pushing for the acceptance and adoption of Libra cryptocurrency.
Although, the letter, written with a letter head of the US Senate, could be seen as anti-innovation, it did not fail of its essential purpose to a very large extent, as the payment firms which the letters were directed to pull out of the Libra association after receiving the scary letters.
The United States Senators shared their deep concerns about Facebook’s Libra project and the Libra Association where the big payment firms are members, putting forward that the social media giant has not responded to challenging questions posed to it on the risk associated with the project, especially to consumers, fintech companies and the global financial system at large.
Urging Mastercard Inc. and its counterparts to be careful, the Senate said “Facebook has not yet demonstrated to Congress, financial regulators—and perhaps not even to your companies—that it is taking these risks seriously.”
As contained in the letter, the senators alleged that “public reporting” indicates that Facebook is not yielding to the requests of the Libra Association member companies to fully understand the digital currency and the technology behind it, the letter inferred that Facebook is not demonstrating how it will guard Libra form facilitating criminal and terrorist financing, moves that could disturb the global financial system.
The letter informed the payment giants that Facebook at the moment is suffering from “privacy violations, disinformation, election interference, discrimination, and fraud” and amid other financial issues without any sign of wanting to put a stop to the failures.
“You should be concerned that any weaknesses in Facebook’s risk management systems will become weaknesses in your systems that you may not be able to effectively mitigate,” the letter points.
Sexual Abuse on Facebook
The Senate quoted a report of “The New York Times” where it accused Facebook of being among the platforms adding to the online child sexual abuse where 12 million of the 18.4 million reports of child sexual abuse photos and videos across the globe were largely linked to Facebook chat application Messenger.
Can Facebook Manage Libra?
The senators said it is out of it to think Facebook would be able to add embedded anonymous global payments through Libra to its encrypted messaging, which is being complained about day in day out.
“Your companies should be extremely cautious about moving ahead with a project that will foreseeably fuel the growth in global criminal activity,” the letter warns.
The two senators warned the payment firms to back out from the Libra association, saying if they continue to relate with Facebook’s Libra, they should “expect a high level of scrutiny from regulators” on all their payment activities which is not going to be limited to Libra.
Crypto Twitter Comments
The move by the senate did not meet twitterratti in good moods, some of them saw the letter as a big threat to technology innovation.
Director VanECK, Gabor Gurbacs, said executives are scared of experimenting and innovating to avoid regulatory scrutiny and undue pressure.
> This is the type of letter executives at @stripe, @Mastercard and @visa (former @Libra_ members) have received.
> Many executives may have chosen not to experiment and innovate in order to avoid regulatory pressure!Sad!
> America can do better!
> Source: https://t.co/M36bkEKJU9 pic.twitter.com/kF3AXf9Xvd
— Gabor Gurbacs (@gaborgurbacs) October 12, 2019
Colin Talks Crypto, a popular YouTuber calls the letter “disgusting”, a view that represents people’s thought about the decision.
What a disgusting letter.
Under the *guise* of caring about the well-being of American citizens, the US Senate really just wants to maintain control of them.
Much like the guise of the “war over terrorism”, to violate people’s lives more.
— Colin Talks Crypto (@ColinTCrypto) October 13, 2019