Senators warn visas of “risks” of Facebook cryptocurrency

<img src = “data: image / gif; base64, R0lGODlhAQABAAAAACH5BAEKAAEALAAAAABAAEAAAICTAEAOw ==” data-chomp-id = “hwkietaf2jf47a8kvmhy” data-format = “jpg” data-height = “2520” data-default-transform = ” UncroppedWideExtraLarge “data-width =” 4476 “data-relative =” false “data-show-background =” true “data-alt =” Senators warn Visa and Mastercard to think twice about joining Facebook The pressure on legislators is increasing. This week this intervention has taken the form of threatening letters from Democratic members of the powerful Senate Banking Committee warning the payment service companies to “expect a high degree of control” in taking over the risks of Libra

Additionally It was announced Wednesday that Facebook CEO Mark Zuckerberg will be the only witness at a hearing before the House Financial Services Committee later this month. These actions are based on a report Declining support for companies that have pledged funds to join the Libra Association, the Geneva-based nonprofit organization overseeing the project, and Facebook’s failure to address concerns about the stability of the global financial system to disperse.

In the letters, Sen. Sherrod Brown, the highest-ranking Democratic member of the Senate Banking Committee, and Sen. Brian Schatz, another Democratic member, request the CEOs of Visa, MasterCard, and Stripe, all of which are members of the Libra Association’s organizations Be careful.

“We are concerned because important questions about the risks that the project poses to consumers, regulated financial institutions and the global financial system remain open,” the letters state. “We urge you to carefully consider how your companies handle these risks before proceeding, as Facebook has not yet proven to Congress, the financial regulators – and possibly your own companies – that it takes these risks seriously. “

Letters further state that Facebook has failed to explain how it can prevent its new digital currency from being used to finance crime and terrorism, or how it protects consumers from the risks that are currently being exposed only to accredited investors are. “Facebook is currently struggling with massive issues such as data breaches, disinformation, electoral interference, discrimination and fraud, and has not proven to be able to control these mistakes,” it says.

The letters also warn financial companies that Facebook’s problems may soon become their own: “You should be concerned that vulnerabilities in Facebook’s risk management systems are becoming vulnerabilities in your systems that may not effectively mitigate them can. “[19659004] Facebook did not respond immediately to a request for a comment. Zuckerberg said earlier that the balance would not move forward without the blessing of the financial supervisors.

Last week, PayPal, one of the original 28 founding member organizations of the Libra Association, announced that it is discontinuing . “PayPal has decided not to participate in the Libra Association at this point,” the company told Gizmodo, adding that it “continues to support Libra’s ambitions.” The news came shortly after David Marcus, who directs the project on Facebook told reporters that he had “no knowledge” of the plans of any particular organization not to attend.

Earlier this year, House democrats were spreading laws aimed at stopping Facebook’s plans, and raised concerns over the use of cryptocurrencies on rock anti-money laundering rules. The bill, known as the “Keep Big Tech Out of Finance Act”, bans any US technology company with more than $ 25 billion in annual digital currency spending. It is expected that legislation will be an issue at Parliament’s hearing, which Zuckerberg will bear witness to.

At a press conference in July, Finance Minister Steven Mnuchin called cryptocurrencies, including Libra, a matter of “national security,” referring to the use of Bitcoin and other digital currencies in a litany of criminal behavior, including “Cybercrime, Tax Evasion, Blackmail, Blackmail Software, Illegal Drugs and Trafficking”.

Original Source