Facebook’s Libra cryptocurrency project got a second day of withering criticism on Capitol Hill on Wednesday, with one California congressman saying its potential dangers could be worse than the terrorist attacks of Sept. 11, 2001.
‘The most innovative thing that happened this century is when Osama bin Laden came up with the innovative idea of flying two airplanes into towers. That’s the most consequential innovation, although this may do more to endanger America than even that.’
Rep. Brad Sherman
With Facebook’s /zigman2/quotes/205064656/composite FB -1.32% David Marcus in the witness chair at the House Financial Services Committee, Rep. Brad Sherman, a Democrat, demanded that the social-media giant’s Chief Executive Mark Zuckerberg testify about what the lawmaker called “Zuckbucks.”
As Sherman compared Libra with the 9/11 attacks, he said that Zuckerberg is creating a cryptocurrency, like the popular and controversial digital-asset bitcoin /zigman2/quotes/31322028/realtime BTCUSD -0.04% , that is often associated with providing “privacy to drug dealers, human traffickers, terrorists, tax evaders and sanctions evaders.”
Nearly 3,000 people were killed in the 9/11 attacks, which were orchestrated by al Qaeda leader Osama bin Laden, who was killed during a raid on his Abbottabad compound on May 1, 2011, ending a decadelong manhunt.
Marcus, who heads the Libra project, has said Facebook won’t launch it until regulators’ concerns are fully addressed. Marcus told the Senate Banking Committee on Tuesday that Facebook would manage Libra under a consortium of 28 companies and nonprofits including credit-card companies Visa Inc. /zigman2/quotes/204223983/delayed AT:VISA -1.90% and Mastercard Inc. /zigman2/quotes/207581792/composite MA -1.17% .
Still, over two days of congressional hearings, lawmakers from both parties peppered Marcus with criticism over Facebook’s spotty stewardship of user data and raised doubts about entrusting the social-media giant with financial information. The company reached a $5 billion settlement last week with the Federal Trade Commission over data-privacy practices, and is likely to be the target of a Justice Department antitrust probe.
“It is long past time we stop bypassing consumers’ privacy in the pursuit of profit,” said Rep. Ayanna Pressley, a Massachusetts Democrat, expressing concern over Facebook’s effort at the Wednesday hearing.
“I have serious concerns with Facebook’s plans,” said Maxine Waters of California, chairwoman of the House committee, in an opening statement. “Facebook’s plans raise serious privacy, trading, national security, and monetary policy concerns, not only for Facebook’s over two billion users, who will have immediate access to these products, but also for consumers, investors and the global economy.”
Several members of that House committee, including Georgia Republican Barry Loudermilk, applauded Facebook’s innovation efforts but worried it “may be just another illicit financing tool.”
“We believe with the appropriate controls…we will improve on the current systems,” Marcus said.