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US Senators Apprehensive of Facebook Crypto Plans

Facebook is facing backlash from the Senators for lax user security. 

Several Democratic senators Brian Schatz, Sherrod Brown, Richard Blumenthal, Elizabeth Warren, and Tina Smith have expressed their concerns about Facebook’s cryptocurrency program, according to a Reuters report.

The Senators wrote a letter to Facebook co-founder and CEO, Mark Zuckerberg.

“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,”

Letter by Senators

“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,” the senators further explained their fears.

That’s why they urge the company to stop the pilot of its cryptocurrency wallet named Novi.

Novi was launched on Tuesday with a view to facilitating cross-border payments. Currently, it is operational in the US and Guatemala.

A Novi spokesperson said, “We look forward to responding to the committee’s letter.”

The company began this project in 2019. A year prior, in 2018, it was embroiled in the Cambridge Analytica data breach scandal.

Right now, it is being investigated for antitrust violations and Instagram’s algorithms causing mental health issues among teenagers, as per whistle-blower Frances Haugen’s testimony. 

All these incidents cast a shadow over the company’s plan to step into Decentralized Finance (DeFi) space.

Reportedly, this month the social media platform might rebrand its name to something indicative of the metaverse. Facebook has expressed in the past its desire to transition from a social media company to a metaverse company primarily. It will have to provide cogent arguments especially regarding data security and the mental health of the users.

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