Social media behemoth, Facebook has had to deal with its fair share of regulatory pressure during the course of a few months only, courtesy its crypto endeavor project, Libra. In the hope of relieving some of that pressure, the platform has hired a Washington-based lobbying firm, FS Vector. According to reports, Facebook’s newest hire is in the wake of increased regulatory push back on its proposed crypto project
Lobbying firms are specialist companies with the primary job of representing clients to politicians and government regulators, which is exactly what Facebook needs for project Libra right now. Founded last year only, FS Vector is a regulatory, compliance, public policy and business strategy advisory firm; per its website its goal is to help companies overcome regulatory challenges and to facilitate their success.
O’Dwyers revealed that as per the lobbying registration documents filed with Congress, Facebook is leveraging the services of FS Vector on “issues related to blockchain policy.”
As soon as the social media giant announced its foray into the digital asset and financial space, it opened the Pandora’s box of regulatory issues and serious concerns amongst the lawmakers. It shook the U.S. government to its core, so much so that Congress, in July, drafted a bill solely directed at Facebook’s project Libra, which aims to bank the unbanked population across the globe.
The bill titled, “Keep Big Tech Out of Finance Act,” prohibited “large platform utilities” from being a financial institution or operating “a digital asset that is intended to be widely used as medium of exchange, unit of account, store of value, or any other similar function, as defined by the Board of Governors of the Federal Reserve System.”
The bill further described “large platform utilities” as a tech company that earns annual global revenues of $25 billion or more. It might not have blatantly singled out Facebook, but its crystal clear that is where the bill was directed.
Additionally, several prominent names have voiced their concerns over Libra and all that it stands for. Back in June, House Financial Services Committee Chair Maxine Waters (D-CA) called for a moratorium and Congressional review of Facebook’s Libra project on the basis of Facebook’s troubled past with privacy.
Even president Trump expressed his concerns over Facebook’s plans of overstepping the function of banks. He tweeted:
If Facebook and other companies want to become a bank, they must seek a new Banking Charter and become subject to all Banking Regulations, just like other Banks.
Hence the need for getting a lobbying firm like FS Vector arose. Reports reveal that John Collins, will be leading the Facebook account for the firm, who has quite the résumé being the FS Vector partner, in addition to being the former vice president of international policy at the American Bankers Association’s international subsidiary, the Bankers Association for Finance and Trade.
Moreover, Collins has also previously served at the U.S. Senate Committee on Homeland Security and Governmental Affairs and also spearheaded Congress’ first research into digital currencies in 2013. Safe to say the social media platform is in good hands.
FS Vector isn’t the only firm that is helping Facebook’s crypto project get through to the regulators. In fact just earlier this month, the platform also hired Susan Zook of Mason Street Consulting, a former aide to Senator Mike Crapo (R-Idaho), the chairman of the Senate Banking Committee.
In addition to Zook’s appointment Facebook also hired Edward Bowles, a former senior bank lobbyist from Standard Chartered, to lobby for Libra in June. Now with the recent hiring of FS Vector, there are at least seven lobbyists for Libra with previous appointments of Sternhell Group, Cypress Group, Davis Polk, BakerHostetler and the OB-C Group.
However there is immense pressure on Libra, as the regulatory issues are forcing some of the founding members of the Libra Association to rethink their decision of backing Libra. Time is of the essence for the social media platform, if they don’t appease the regulators fast enough, Libra could potentially be dead on arrival.