House Democrats call for Facebook to halt cryptocurrency project

House Democrats call for Facebook to halt cryptocurrency project
© The Hill Illustration

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.

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“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,” they continued. 

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: Amazon to challenge Pentagon cloud contract in court | State antitrust investigation into Google expands | Intel agencies no longer collecting location data without warrant Civil rights groups demand changes to Facebook's political speech policy Hillicon Valley: Federal inquiry opened into Google health data deal | Facebook reports millions of post takedowns | Microsoft shakes up privacy debate | Disney plus tops 10M sign-ups in first day MORE, COO Sheryl Sandberg and Project Libra chief David Marcus.

House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersHouse passes Ex-Im Bank reboot bill opposed by White House, McConnell White House, McConnell come out against House bill on Ex-Im Bank Divides over China, fossil fuels threaten House deal to reboot Ex-Im Bank MORE (D-Calif.) and Democratic Reps. Carolyn MaloneyCarolyn Bosher MaloneyTop House Democrats ask for review of DHS appointments Maloney primary challenger calls on her to return, donate previous campaign donations from Trump Appeals court clears way for Congress to seek Trump financial records MORE (N.Y.), Wm. Lacy ClayWilliam (Lacy) Lacy ClayGOP senator blasts Dem bills on 'opportunity zones' 'Squad' members recruit Raskin to run for Oversight gavel Speier to run for Oversight gavel MORE (Mo.), Al GreenAlexander (Al) N. GreenTrump administration suspends oil and gas production on 130 plots in Utah after challenge Why fear should not blind us to the promise of AI: A healthy dose of optimism Trump at rally says impeachment an 'attack on democracy itself' MORE (Texas) and Stephen LynchStephen Francis LynchBrindisi, Lamb recommended for Armed Services, Transportation Committees Overnight Defense: Dems release first impeachment probe transcripts | White House officials refuse to testify Monday | US, Iran mark 40th anniversary of hostage crisis White House officials refusing to testify Monday 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.

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 will be one of dozens of companies with investing and voting power in the project, along with Uber, Mastercard, Spotify, Vodafone, Coinbase and Women's World Banking. 

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 such as 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 in a separate app.