Zuckerberg is to be presented once again in front of the congress, where he will defend Libra before the US lawmakers. The hearing is titled “An Examination of Facebook and Its Impact on the Financial Services and Housing Sectors,” announced congresswoman Maxine Waters. Zuckerberg will testify on October, 23 later this month.
Previously in July, Chairwoman Waters sent a letter to facebook where they requested to halt the activities related to Libra and the associated wallet Calibra till further notice. The notice came with a call for hearing in front of the congress. The reason defined was the threat towards the monetary and financial system of the US, as there were serious concerns about the privacy and security of the digital currency proposed by Facebook. The letter stated that Facebook fails to provide comprehensive information about the risks, which further rose the concerns of regulatory unclarity.
As Libra is meant to be launched on a massive scale, with 27 companies on board and potentially trillions of dollars of investment, all the cybersecurity questions should be clarified comprehensively before the launch. Since crypto has been exposed to hackings and money laundering for a long time now, where multiple crypto exchanges have suffered losses of billions of dollars, the mode of operation of Libra should be clarified regarding these concerns. In a previous hearing of the CEO of Calibra, Congresswoman Maxine Waters said:
“Facebook has proposed backing Libra tokens with government currencies and government-guaranteed securities and holding them in a so-called Libra Reserve, to be governed by Facebook and its partners. Ownership of government assets on such a massive scale without proper oversight threatens to concentrate government influence in the hands of a few elites. Ultimately, if Facebook’s plans come to fruition, the company and its partners will wield immense economic power that could destabilize currencies and governments.”
The risk associated with Facebook’s new currency according to the letter was massive as Facebook is under the use of almost a quarter of the population. The moratorium was called to hold public hearings regarding the risks and benefits involved in launching a cryptocurrency on such a large scale. The CEO of Calibra, David Marcus was called for a hearing earlier this year where the congresswoman aggressively asked the CEO to commit to the moratorium until “Congress enacts an appropriate legal framework to ensure that Libra and Calibra will do what they claim it will do.” The letter to Facebook read:
These risks are even more glaring in light of Facebook’s troubled past, where it did not always keep its users’ information safe. For example, Cambridge Analytica, a political consulting firm hired by the 2016 Trump campaign, had access to more than 50 million Facebook users’ private data which it used to influence voting behavior.
This isn’t the first time Mark Zuckerberg has been called for such a hearing. After the Cambridge Analytica case, he was summoned by the congress where a session of aggressive questioning was held to determine what exactly happened in the Cambridge Analytica case and how Facebook would be proceeding, knowing that they breached the privacy of billions.