Senate Democrats are calling for Facebook to give up Novi and exit the cryptocurrency space altogether.
Will Facebook Cease All Crypto Ambitions?
The news comes after it was announced that the social media giant was joining hands with popular cryptocurrency exchange Coinbase to support whatever assets it was set to offer those who took part in the latest Novi wallet testing phase. The testing is set to be carried out in the coming months in both the U.S. and Guatemala.
Several Democrats – including Brian Schatz of Hawaii, Sherrod Brown of Ohio, and Elizabeth Warren of Massachusetts – penned a letter to Facebook founder and CEO Mark Zuckerberg asking him to give up his cryptocurrency ambitions and exit the financial space. The sentiment is that Zuckerberg and Facebook cannot be trusted with other people’s money and financial information following the Cambridge Analytica scandal that was revealed in the year 2018.
The letter explains:
Facebook is once again pursuing digital currency plans on an aggressive timeline and has already launched a pilot for a payments infrastructure network even though these plans are incompatible with the actual financial regulatory landscape — not only for Diem specifically, but also for stable coins in general.
Cambridge Analytica is something that is likely to haunt Facebook for several years to come. While the company has been embroiled in other scandals, Cambridge rings heavily with many users both current and past. The situation involved Facebook selling people’s private information to third parties for many years for advertising purposes.
Users were not aware of what was going on, and Facebook’s CEO Zuckerberg ultimately spent many hours before a congressional panel trying to explain himself. In the end, the company wound up paying billions of dollars in fines and the situation came to an end, but for many, Facebook is still the same shady conglomerate it was before, and the idea that it will have a role in the financial industry and have access to people’s monetary information is quite scary to some.
The Senators’ letter continues with:
Facebook cannot be trusted to manage a payment system or digital currency when its existing ability to manage risks and keep consumers safe has proven wholly insufficient. We urge you to immediately discontinue your Novi pilot and to commit that you will not bring Diem to the market.
So Many Problems Gathering At Once
While the social media company has not issued a formal response or statement just yet, a Novi representative did mention the following:
We look forward to responding to the committee’s letter.
Not long ago, the lid was pulled off Facebook once again by whistleblower Frances Haugen, who testified before a Senate Commerce Committee regarding the harms Facebook and its products have done and can do to users. Many analysts believe more information is going to come out soon.
