Senate Banking Committee Has Questions about Secret Facebook Crypto Project

 

 

 

 

 

The Senate Committee on Banking, Housing, and Urban Affairs sent a letter to Facebook founder and CEO Mark Zuckerberg this week, in an attempt to get answers about the social media giant’s secretive cryptocurrency project, code-named “Project Libra.”

Recent reports have revealed that Facebook has been busy building relationships with various online merchants and financial services companies as it prepares to develop and launch a new crypto payments system that would be integrated into its social media platform. Other reports have suggested that the company is developing its own stablecoin and may be trying to raise as much as $1 billion from investors to facilitate development.

The Banking Committee letter addressed concerns about privacy rights and data collection and referenced a recent Wall Street Journal report that highlighted Facebook’s ongoing recruitment of banks and merchants to help with Project Libra. The Committee was particularly interested in questions about how Facebook uses consumer data:

“Last year, Facebook asked U.S. banks to share detailed financial information about consumers. In addition, privacy experts have raised questions about Facebook’s extensive data collection practices and whether any of the data collected by Facebook is being used for purposes that do or should subject Facebook to the Fair Credit Reporting Act.”

The committee then asked Zuckerberg to respond to seven questions, including several that align with recent and ongoing concerns about Facebook’s alleged failure to protect user data or respect customer privacy. The first two questions dealt specifically with the company’s new cryptocurrency payment system project:

“How would this new cryptocurrency-based payment system work, and what outreach has there been to financial regulators to ensure it meets all legal and regulatory requirements?

 

What privacy and consumer protections would users have under the new payment system?”

Other questions focused on whether Facebook has indeed received consumer financial information from financial companies, what type of information it received, what it does with that data, and how it protects consumer information. In addition, the committee sought information about whether Facebook sells consumer information to “unaffiliated third parties.”

Another question asked whether Facebook has or uses information about “creditworthiness, credit standing, credit capacity, character, general reputation, personal characteristics, or mode of living” to determine eligibility for marketing of products “related to (1) credit, (2) insurance, (3) employment, or (4) housing.” Finally, the committee asked about the steps Facebook uses to ensure that the aforementioned information isn’t used “in violation of the Fair Credit Reporting Act.”

Facebook has repeatedly drawn fire in recent years for a series of controversies, ranging from allegations of discriminatory advertising to privacy violations, misuse of customer data, and censorship of certain political speech.

Author: Ken Chase

Freelance writer whose interests include topics ranging from technology and finance to politics, fitness, and all things canine. Aspiring polymath, semi-professional skeptic, and passionate advocate for the judicious use of the Oxford comma.

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