House Democrats call for Facebook to halt cryptocurrency project

House Democrats call for Facebook to halt cryptocurrency project

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 ZuckerbergBig Tech has big credibility gap Hillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Maxine Waters says her committee will call in Zuckerberg to testify about Libra MORE, COO Sheryl Sandberg and Project Libra chief David Marcus.

House Financial Services Committee Chairwoman Maxine WatersMaxine Moore WatersLawyer says suspect in mob boss killing believed he was on mission from Trump Hillicon Valley: Trump seeks review of Pentagon cloud-computing contract | FTC weighs updating kids' internet privacy rules | Schumer calls for FaceApp probe | Report says states need more money to secure elections Here are the 95 Democrats who voted to support impeachment MORE (D-Calif.) and Democratic Reps. Carolyn MaloneyCarolyn Bosher MaloneyHere are the 95 Democrats who voted to support impeachment House passes bill to reauthorize funding for 9/11 victims It's time for the left to advance a shared vision of national security: Start by passing the NDAA MORE (N.Y.), Wm. Lacy ClayWilliam (Lacy) Lacy ClayHere are the 95 Democrats who voted to support impeachment The Hill's Morning Report - Presented by JUUL Labs - Trump attack on progressive Dems draws sharp rebuke Pressley: Democrats don't need 'any more black faces that don't want to be a black voice' MORE (Mo.), Al GreenAlexander (Al) N. GreenTrump says 'Squad' and Dems have 'Trump Derangement Syndrome' over impeachment Trump changes tune, says he 'might' watch part of Mueller testimony The Hill's Morning Report — Mueller Time: Dems, GOP ready questions for high-stakes testimony 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.