The Senate hearing for Facebook on Libra was conducted yesterday, and just like many predicted, it was a bloodbath. Crypto insiders expected lawmakers to come hard on Facebook’s past with information mishandling, and that was pretty much the topic sentence of the day.
Try as Facebook did to convince everyone that Libra was a safe currency that sought to only serve the people, the question of trusting the currency- and by extension, Facebook- after all that has happened was always raised.
Facebook’s pitch hits a brick wall
At the hearing, David Marcus, Facebook’s lead on the Libra project, repeatedly tried to assure the senate committee that if innovations in payments weren’t being championed by American tech giants like Facebook, foreign entities would. He highlighted that Facebook has democratized free communications for billions across the world.
He added, “We want to help do the same for digital currency and financial services, but with one key difference: We will relinquish control over the network and currency we have helped create.” Marcus pulled out all the stops, assuring the senate that Libra will be used for facilitating cross-border money transfers and help people to make easier purchases. As he did in his opening statement, he described the roles of the Libre Reserve, Libra Association, and the Libra Blockchain.
He also touched on the issue of security, assuring lawmakers that the currency wouldn’t be used for illicit purchases since users will need to secure their accounts with government identification.
All of this sounded good, but there was still one glaring problem; Facebook’s dismal public reputation regarding data handling.
Ohio Senator steals the show
However, one senator that really made an impression was Sherrod Brown. The notorious senator from Ohio took his time to shred Facebook and its ambitious crypto project.
The Ohio Senator likened Facebook to a toddler that has gotten his hands on “too many matches.” He claimed that the tech company has repeatedly fallen short of regulatory standards and expectations. And each time it messes up, it finds a way to waterdown the issue at hand, tagging discrepancies a “learning experience.”
He added, “Facebook has two competing missions – make the world more open and connected and make a lot of money. And as Facebook attempts to serve both of those missions, they wreak havoc on the rest of us.”
Senators pulled out some game film
In his bid to highlight doubts over the current plan of the social media giant, Senator Brown and his colleagues pointed out Facebook’s repeated privacy scandals, the fact that it was used to help spread dangerous propaganda in Myanmar, and most especially, its use by Russian agents to influence the outcome of the last general elections of the United States.
Establishing this, he further said to Marcus, “It is pretty hard to trust you with a worldwide currency that you are setting up in Switzerland.”
After the hearing, Brown spoke to news outlet Yahoo Finance, where he admitted that he didn’t get any reassuring messages from Facebook that eased any of his concerns going into the hearing. He reinforced his stance that Facebook should be made to stop work on the cryptocurrency project at once, stating that the company’s past is pretty much an indication of even more dangerous things to come.
In part, he said, “You should not be the…new Central Bank for the world. You shouldn’t run this out of the Swiss bank account, currency operation. We don’t trust you to do that. You’ve betrayed the public interest so many times.”