Members of the U.S. House of Representatives questioned Financial Crime Enforcement Network (FinCEN) director Kenneth Blanco about Facebook’s planned cryptocurrency Thursday.
Representatives Emanuel Cleaver, II (D-MO), Trey Hollingsworth (R-IN), Bill Foster (D-IL) and French Hill (R-AR) held a briefing with members of the House Financial Services Committee, discussing the Libra project with Blanco, who heads up FinCEN, the U.S. Treasury Department’s anti-money-laundering wing.
The briefing was held as part of a broader look at how machine learning and artificial intelligence can limit illicit money laundering and related activities.
Cleaver’s concern seems to stem from Facebook’s alleged role in improperly storing user data and spreading misinformation over the past few years, according to a press release.
“We’ve seen the significant damage that foreign adversaries and bad actors have wrought on our democracy through Facebook’s platform, and that was simply through messaging and advertising,” he said in a statement, adding:
“Before we allow such a giant corporation to begin processing millions to billions of financial transactions, we have to study these issues and ensure we have the tools and guardrails in place to deter terrorists, extremists, and/or enemies from utilizing such a platform to do harm to our nation.”
‘Nefarious actors’
While the release did not reveal what Blanco’s views on Libra are, or whether or how FinCEN intends to oversee the project, it did say that Cleaver’s questions focused on Libra and Calibra, a new Facebook subsidiary that will develop digital wallets and other services for the cryptocurrency.
Calibra registered as a money services business with FinCEN earlier this year.
Broadly, “nefarious actors” are finding new ways to conduct illicit financial activities, Cleaver said in the statement, citing cryptocurrencies and other new marketplaces as tools these actors can adapt.
“Now that we’re seeing a giant corporation like Facebook—which has already shown an inability to identify and impede these kinds of actors at an acceptable level—creating its own virtual currency called Libra, it cannot be understated the importance of Congress and financial transmitters to be proactive in utilizing the newest and most powerful technologies to ensure the financial system is not being used improperly,” he added.
He went on to say that the briefing participants “had a fruitful discussion” on how the U.S. can take steps to prevent misuse.
Bipartisan backlash
Thursday’s briefing comes amid wide bipartisan backlash to Facebook’s cryptocurrency plan, which was formally unveiled last week.
The full House Financial Services Committee is scheduled to hold a hearing on Libra next month, a day after the Senate Banking Committee holds its own.
Other regulators worldwide are examining the cryptocurrency, with the G7 convening a task force to investigate its implications.
Cleaver has long been concerned with potentially illegal activities conducted with cryptocurrencies. According to the release, he has called on the Bitcoin Foundation and the Chamber of Digital Commerce to find ways of preventing extremist groups from using cryptocurrencies.
He has also called on FinCEN to investigate the space, after U.S. special counsel Robert Mueller found that Russian intelligence officials used bitcoin to fund activities interfering with the 2016 presidential election.
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