At Hearing, Facebook’s Libra Crypto Plans Face Hostility From Senators

July 16, 2019

Updated: 3:45 p.m. ET, July 16, 2019

By Rebecca Heilweil

Facebook's plans to develop a digital currency faced a skeptical and at times hostile reception in Congress on Tuesday as senator after senator lacerated the company and its CEO Mark Zuckerberg over issues of data privacy and the ways the platform was manipulated during the 2016 election.

The Senate Banking Committee had called on David Marcus, head of the currency project that Facebook calls Libra, to testify about how the company plans to regulate and police the new financial platform.

But it didn't take long for the hearing to turn into a referendum on Facebook's history. "No one elected Mark Zuckerberg," said Sen. Sherrod Brown in his introductory remarks. "They're not running a government. They're running a for-profit laboratory."

Brown ⁠— a vocal critic of Facebook ⁠— accused the company of destroying journalism, running psychological experiments on users, and contributing to the spread of propaganda that led to ethnic cleansing in Myanmar.

"They moved fast and broke our political discourse, they broke journalism, they helped incite a genocide, and they're undermining our democracy," he said.

Facebook has encountered an intense wave of resistance in Washington ever since announcing plans to introduce the Libra currency last month. Over the past week, Fed Chairman Jerome Powell, Treasury Secretary Steven Mnuchin, and even President Donald Trump himself have all raised questions about Libra.

On the eve of the Senate hearing, Mnuchin even warned that "Libra could be misused by money launderers and terrorist financiers" and called the digital currency a national security issue.

But in many ways, their criticism was muted compared to what Marcus heard Tuesday in Congress. At one point Senator Brown called Facebook "dangerous" and said, "We would be crazy to give them a chance to experiment with people's bank accounts."

While Sens. Mike Crapo, Pat Toomey, and Mike Rounds noted that the digital currency could spur welcome innovation, Sen. John Kennedy (R-La.), and later Sen. Martha McSally, joined Sen. Brown in aggressively criticizing the platform.

"Can we agree that a banker should be trustworthy? Can we agree that a banker should be honest? Can we agree that a banker should respect a customer's privacy?" asked Kennedy. Marcus responded to every prompt, but then said: "We are not going to engage in banking services."

Kennedy then extensively hounded Marcus for how Facebook handled the efforts by Russia to disrupt the 2016 presidential election through Facebook.

"Isn't it true ⁠— and I really want your opinion ⁠— that Facebook has chosen to advance a set of values in which truthful reporting has been displaced by flagrant displays of bullshit?" asked the Senator.

"I don't have an answer to that question, sir," said Marcus.

At one point, the Louisiana official said sarcastically: "Facebook wants to control the money supply. What could possibly go wrong?"

Sen. Martha McSally began her questioning by pointing to the company's many scandals, including data breaches, allegations of changing users' privacy settings without notice, and the sale of user data. "It's one after another after another."

"I don't trust Facebook, and it's because of the repeated violations of your users' privacy, the repeated deceit. And I'm not alone," she said "Instead of cleaning up your house, you're now launching into another business model with Libra."

"I don't want to get into the technical stuff. I'm talking about the trust issue," she continued. "You violated privacy in the past as a company. You continue to have issues."

Throughout the hearing, Marcus tried to assure the senators of the integrity of the Libra platform and insisted that users' financial data would be protected, while saying Facebook overall would have to earn their trust.

"No financial data or account data that is actually collected in Calibra to offer the service will actually be shared with Facebook," said Marcus. "We've heard loud and clear from people, they don't want those two types of data streams connected."