A long list of US consumer advocacy groups have called upon many of the nation’s regulators to put the brakes on Facebook’s foray into the crypto asset space. The broad coalition of concerned parties sent a joint letter to various agencies earlier today.
The groups state that the potential risk to consumers using Libra is far too great. As such, they say efforts must cease until the company answers a long list of questions.
Yet More Organisations Want Answers Regarding Facebook’s “Crypto” Asset
Social media giant Facebook detailed its much-talked-about digital currency, Libra, on June 18. Since then, a growing list of government agencies have raised concerns about the project, which is due for release in 2020.
The latest group to call for the company to stop whilst regulators to learn more about the crypto asset project is an ad hoc coalition of 33 consumer advocacy groups. Amongst them are Public Citizen; the Economic Policy Institute; and the Center for Digital Democracy.
The group sent a letter to US regulations earlier today. The recipients of the complaint include the US Securities Exchange Commission; US Federal Trade Commission; Office of the United States Trade Representative; and the U.S. Commodity Futures Trading Commission. The list of concerns were also sent to Calibra, the recently established subsidiary of the social network company.
The complaint alleges that regulators cannot possibly know how Libra will impact global finance and subsequently consumer protections given the lack of information known about it:
“The U.S. regulatory system is not prepared to address these questions. Nor are the regulatory systems of other nations or international institutions… All of us believe the risks posed by Facebook’s proposal are too great to allow the plan to proceed with so many unanswered questions.”
The issues raised by the group relate to security, consumer protection, how the company plans to combat money laundering, whether it could be manipulated by collusion amongst members, and if it would impact of the national sovereignty of developing nations.
The letter concludes by stating:
“The Facebook proposal must be put on hold until these numerous and fundamental questions are resolved.”
As mentioned, Facebook has grabbed the attention of lawmakers the world over with its recently-detailed foray into the crypto asset space. Regulators in the US; the UK; France; and other nations have all expressed concerns about the San Franscico-based firm’s ambitions.
In Europe, a G7 task force has been assembled to help regulators further understand the scope of the project and its likely impact on global finance.
However, not every government agency around the world seems quite as concerned about Facebook’s Libra. Recently, a domestic news publication reported on Russia’s finance minister declaring that there would be no special regulations for Libra and that it would simply fall under the scope of the general crypto asset regulations that the nation’s lawmakers are currently writing.
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