US Consumer Groups Ask Regulators to Stop Facebook’s Foray into Crypto

Several US consumer advocacy groups have urged local regulators to stop Facebook’s delve in the cryptocurrency space. The broad coalition of concerned parties earlier sent a joint letter to different agencies. 

According to the groups, the possible risk to individuals utilizing Libra is way too great. Therefore, efforts should cease until the firm responds to the questions.

Since Facebook detailed its cryptocurrency Libra on June 18, various government agencies have raised concerns regarding the project, which is slated for launch next year.

An ad hoc coalition of 33 consumer advocacy groups is the latest to call for Facebook to stop as regulators examine the project. Among them are the Center for Digital Democracy, the Economic Policy Institute, and Public Citizen.

The recipients of the group’s complaint include the US Federal Trade Commission, US Securities Exchange Commission, the US Commodity Futures Trading Commission, and Office of the United States Trade Representative. The list of concerns was also sent to the newly formed Facebook subsidiary, Calibra.

“The U.S. regulatory system is not prepared to address these questions. Nor are the regulatory systems of other nations or international institutions… All of us believe the risks posed by Facebook’s proposal are too great to allow the plan to proceed with so many unanswered questions,” the complaint reads.

The group raised concerns relating to consumer protection, security, how the firm intends to prevent money laundering, if it can be manipulated by collusion among members, and whether it would affect developing countries’ national sovereignty.

“The Facebook proposal must be put on hold until these numerous and fundamental questions are resolved,” the letter concludes.

Regulators in the UK, France, the US, and other countries have all expressed concerns about Facebook’s ambitions. A G7 task force has been formed in Europe to help regulators understand the project’s scope and how it will affect global finance.