News by Coindesk: Nikhilesh De
Facebook’s blockchain lead David Marcus told lawmakers he would be willing to accept 100 percent of his salary in the social media giant’s proposed Libra cryptocurrency.
During a Senate Banking Committee hearing on the controversial project Tuesday, the ranking member of the panel, Sen. Sherrod Brown (D-Ohio), asked Marcus if he trusted Libra enough to put skin in the game this way.
“You really think people should trust you with their hard-earned money, I think it’s delusional,” Brown said, after enumerating Facebook’s history of privacy abuses. He then posed the question: “Will you accept all of your compensation in that new currency?”
Marcus initially sidestepped the question, saying that Libra is “not designed as a substitute for bank accounts.” After Brown pressed him, the Facebook executive said he would “trust all of my assets in Libra – yes, I would.”
Only after the lawmaker pressed him again on the specific question about salary did Marcus answer in the affirmative, saying:
“I would, because it is backed 1-for-1 with a reserve.”
‘What the hell does that mean?’
The two-hour hearing was full of such exchanges between Marcus and lawmakers.
For example, when Marcus reiterated his talking point that Facebook would be only one of many companies involved in the Libra project, Brown shot back: “You know better than that, only Facebook [as a social media company] has access to 2 billion people.”
Several times during the hearing, Marcus said trust is “primordial.” At one point, Brown asked him, “What the hell does that mean that ‘trust is primordial’?”
“It means we need to continue to do better,” Marcus answered.
Aside from data privacy, lawmakers grilled Marcus on consumer protection. Sen. Kyrsten Lea Sinema of Arizona asked what would happen if a resident of her state using a wallet developed in Spain got scammed by someone in Pakistan. Where could the consumer go for recourse?
“Americans will likely use an American-based wallet service,” Marcus replied, adding that if not, their rights to redress would depend on the provider’s terms and conditions.
Support for legislation
Speaking to reporters after the hearing, Brown, the banking committee’s highest-ranking Democrat, said he would support legislation reining in Libra.
He sounded unpersuaded by Marcus’ assurances that Calibra, Facebook’s wallet subsidiary, would not share user data with its parent or with the Libra Association consortium.
Facebook, Brown said, “can’t be trusted to protect people’s privacy. Facebook has shown time after time after time it’s betrayed the public trust and I can’t imagine there’s anything that would make us trust them.”
“If they’re arrogant enough to just blast ahead on this and the hearing [seemed to show] that, I think legislation would be in order, I think there’d be broad bipartisan support.”
Brown said he was not sure what specific legislation might look like, and did not comment on whether the Senate would take up a draft bill circulated by the House Financial Services Committee banning large tech firms from issuing currencies.
He reiterated his disbelief that Facebook would have equal standing with other members of the Libra Association. While the company may have only 1 percent of the governing council’s votes, “Facebook, because it has 2 billion subscribers, will be the big dog,” Brown said.
In Zuck we distrust
The Senate hearing was scheduled in the days after Libra was unveiled in June; the House Financial Services Committee will hold its own version tomorrow.
Overall, Tuesday’s hearing was heavy on Facebook-related questions and light on crypto issues, indicating that the lawmakers were more worried about the company than the technology.
In contrast to the relatively measured introductory remarks of committee chairman Mike Crapo (R-Idaho), Brown set the tone with three words in his first statement: “Facebook is dangerous”
Bitcoin, the currency that started it all, was mentioned only a couple times, while there was much discussion of nonfinancial controversies like Facebook’s de-platforming of conservatives or its role in election meddling.
As Brown later told reporters:
“Clearly Americans don’t trust Wall Street, they’re now putting Big Tech into the same category.”
Watch the entire hearing here:
Anna Baydakova contributed reporting.
David Marcus image via Senate Banking Committee.