On the evening of July 16th, Beijing time, the US Senate Bank, Housing and Urban Affairs Committee held a hearing on the theme of “Reviewing Facebook's Digital Currency and Data Privacy Considerations”. David Block, Head of Facebook Blockchain and CEO of Calibra Presented as a hearing person. The hearings were full of gunpowder, privacy issues, trust crisis, data protection, national security, and jurisdiction. Members of Congress repeatedly bombed Marcus. Coincidentally, at the end of the hearing, Bitcoin suddenly plummeted and directly penetrated the $10,000 mark, adding a touch of color to the conference.
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After the hearing began, Marcus first read the next manuscript and read the testimony of the hearing. Like the previous testimony, Macus mainly emphasized Facebook's positive attitude towards supervision in the testimony. He said that Libra would not be launched one day without approval. Of course, Macus also illustrates the huge potential of Libra as a payment tool and Facebook's future attitudes and efforts in anti-money laundering and counter-terrorism. In fact, in the face of many questions from members of Congress, Marcus's answer is also closely related to this testimony, and the standard answer is made within the framework of the testimony.
Calibra CEO David Marcus
Another member with a difficult hair is a full-scale attack from all angles. Since Libra is registered in Switzerland, Mike Crapo, chairman of the US Senate Banking Committee, has first questioned regulatory issues and whether Libra will accept the United States to lead Libra's legal supervision. Marcus replied that Facebook registered Libra in Switzerland not to evade US regulations. Libra will be overseen by the Swiss Financial Market Supervisory Authority (FINMA) and will also be subject to the privacy of the Swiss Federal Data Protection and Information Commissioner (FDPIC). However, Libra will comply with US tax, anti-money laundering and anti-fraud laws, as well as FinCEN (US Financial Crimes Enforcement Network).
Mike Crapo, Chairman of the US Senate Banking Committee
Anti-money laundering and counter-terrorism are another major issue. At least three members of Congress have asked Marcus about this issue, and some even raised the issue to the national security level. Marcus said Libra users need KYC before using products such as Calibra digital wallets, and Libra will actively cooperate with national regulators. For the United States, how to prevent funds from flowing to sanctioned countries (such as Iran and North Korea) is an important issue. For, Marcus's answer is almost like a withdrawal. The answer without detailed support clearly does not satisfy the members.
Data privacy protection is the highlight of the hearing, and it is also directed at the Facebook company itself, compared to Libra is a secondary issue. In 2018, the "Cambridge Analysis Portal" broke out, and Facebook was smashed the personal information of 50 million users, which directly led to the user's trust crisis on Facebook. Many members have cited this incident and have accused Facebook of using user data to make profits and abuse personal privacy data before asking questions. Marcus admits that Facebook has made mistakes in the past and is now taking various measures to ensure the security of user data and privacy, but it does take a long time to win back people's trust. He said Libra will separate social and financial information when processing user information, and will also give users other payment options, including credit cards and other wallets.
However, in the past, Facebook is facing more trust: after having a previous record, what can Facebook rely on to regain the trust of users? In fact, this issue is not just a technical or institutional issue. What needs to change is Facebook's perception of stigmatization in people's minds (of course, this stigma is not awkward). Sherrod Brown, the Democratic vice chairman of the Senate Banking, Housing and Urban Affairs Committee, is particularly strong in this regard. After Marcus slightly emphasized that Libra pays great attention to user privacy and does not touch user information, Mr. Brown said directly: "You don't want to tell me these things. Facebook abuses the trust of users and has recently been fined $5 billion. What believes in you?" Although Marcus once again explained that Facebook is only one of the 100 members of the Libra Association, but Brown is not buying it, it seems that "a rat has a bad porridge" means. Similarly, one of the latter members said bluntly that Facebook should first solve the old problem before making a new project. In this regard, Marcus is speechless.
Sherrod Brown, Vice Chairman of the Democratic Party of the Senate Banking, Housing and Urban Affairs Committee
In fact, the reason why data privacy issues are so magnified is largely because of objectivity. That is, Facebook is really too big. Sherrod Brown, the Democratic vice chairman of the Senate Banking, Housing and Urban Affairs Committee, said Facebook is dangerous, although it does not intentionally make itself dangerous; but its influence is too great to manipulate billions of users (2016, Russia suspects that it will spread false news through Facebook to interfere in the US presidential election. Some Members believe that Facebook is not a company but a country. With such a large volume, it may be that hundreds of millions of users around the world have to be launched, and they have to worry about the members.
At the same time, some lawmakers began to question Facebook's motivation to do Libra projects. Some MPs who don't know much about Libra's tokens suggest that Facebook is already so big. Is it necessary to get involved in the currency, is it to be the Fed? Some members also said directly that Facebook is doing Libra just to become bigger. Marcus must be helpless: "What use is it with me?"
Throughout the hearing, data privacy protection is undoubtedly the biggest focus, and this is one of the biggest obstacles Facebook faces before further promoting Libra. The crisis of trust caused by data problems adds a bit of weight to this obstacle. According to the only words in Marcus's answer, we can see that Libra seems to be just a thick frame. When it comes to specific details, such as organizational regulations and plans for the use of future profitable funds, Marcus can often only respond with ambiguity. On the evening of the 17th, Marcus will attend the hearing of the House of Representatives. The House Financial Services Committee is owned by the Democrat Marxin. Maxine Waters is the chairman, and she has repeatedly called for Facebook to suspend the development plan, which is one of Libra's number one opponents in the United States.
It is foreseeable that Facebook's path to compliance must be difficult, perhaps more difficult than we think. Yesterday, due to today. Maybe Facebook itself will not think about how much mistakes the past mistakes will make in the future.