4 US Lawmakers Join Call to Freeze Facebook's Libra Project

U.S. lawmakers are formally calling on Facebook to cease all development of its Libra cryptocurrency in a new letter sent to executives at the social media giant.

Democrats from the U.S. House of Representatives wrote an open letter to Facebook Tuesday, calling on a moratorium to all libra development while the Financial Services Committee and affiliated subcommittees hold hearings to determine how it would operate and what protections would be implemented to protect user privacy.

The letter described concerns with Facebook's track record, a well as the potential for libra to act as a new global currency system.

"While Facebook has published a 'white paper' on these projects, the scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. 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 letter references recent privacy issues involving Facebook, including the Cambridge Analytica scandal, where a political consulting firm gained access to the data of more than 50 million Facebook users. Facebook is already expecting to pay a $5 billion fine to the Federal Trade Commission as a result of its involvement with Cambridge Analytica, and remains under a consent decree"for deceiving consumers and failing to keep consumer data private.

"Because Facebook is already in the hands of a over 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," the letter said.

Since the project's formal announcement, regulators and government entities worldwide have expressed caution or alarm, with members of the G7 forming a task force to look into the project and various ministers calling for Facebook to share more details, or otherwise cease development.

The letter comes days after Facebook reportedly briefed Congressional aides about the project.

In a contributed piece to liberal political and public policy magazine The American Prospect, an anonymous House Democratic aide wrote that the legislative aides met with Libra's head of policy, who outlined different aspects of the project, including Facebook's aim to have libra go live by next year and to maintain its value using a basket of fiat currencies.

The Congressional staffers present at the briefing also apparently asked what information Facebook would have if users transferred libra using WhatsApp or Messenger, two of the instant messaging apps Facebook owns and operates.