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 ZuckerbergOvernight Health Care: Juul's lobbying efforts fall short as Trump moves to ban flavored e-cigarettes | Facebook removes fact check from anti-abortion video after criticism | Poll: Most Democrats want presidential candidate who would build on ObamaCare Hillicon Valley: Google to promote original reporting | Senators demand answers from Amazon on worker treatment | Lawmakers weigh response to ransomware attacks Facebook removes fact check from anti-abortion video after criticism MORE, COO Sheryl Sandberg and Project Libra chief David Marcus.

House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersManufacturing group leads coalition to urge Congress to reauthorize Ex-Im Bank Democrats' impeachment message leads to plenty of head-scratching Trump officials vow to reform Fannie, Freddie if Congress doesn't act MORE (D-Calif.) and Democratic Reps. Carolyn MaloneyCarolyn Bosher MaloneyReport: Americans unprepared for retirement Senate approves fund to provide compensation for Sept. 11 victims Here are the 95 Democrats who voted to support impeachment MORE (N.Y.), Wm. Lacy ClayWilliam (Lacy) Lacy ClayHouse Democrats blur lines on support for impeachment Appetite for Democratic term limits fizzling out Young Democrats look to replicate Ocasio-Cortez's primary path MORE (Mo.), Al GreenAlexander (Al) N. GreenTen notable Democrats who do not favor impeachment Methane emissions continue to drop Two coal miners demand McGrath stop using their images in McConnell attack ad MORE (Texas) and Stephen LynchStephen Francis LynchHillicon Valley: Appeals court rules Trump can't block people on Twitter | Tech giants to testify in House antitrust investigation | DHS set for grilling over facial recognition tech | Commerce to allow sales to Huawei Facebook official responds to Maxine Waters on cryptocurrency project House Democrats call for Facebook to halt cryptocurrency project 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.