Facebook’s embattled project to build its own cryptocurrency, dubbed “Libra” by the social network, may not happen at all, according to an SEC filing by the company.
In the filing, the tech giant told its investors that due to the unpredictability of the market, “there can be no assurance that Libra or our associated products and services will be made available in a timely manner, or at all.”
“We do not have significant prior experience with digital currency or blockchain technology, which may adversely affect our ability to successfully develop and market these products and services.”
Facebooks blunt warning that the project could be delayed or even canceled comes amid high-profile political pressure over its planned foray into cryptocurrencies.
In a press conference last month, Treasury Secretary Steven Mnuchin warned that Facebook’s Libra coin was a “national security issue” and that it “could be misused by money launderers and terrorist financiers.”
Facebook faced a grilling over its planned cryptocurrency in the Senate last month, with Sen. Tom Cotton (R-AR) interrogating the company’s representative on whether the coin could be used as a political weapon, to financially blacklist individuals who aren’t in line with the tech giant’s values.
Democrat politicians took a different approach, with Rep. Carolyn Maloney (D-NY) arguing that the creation of currencies should be left to governments and “democratically accountable institutions.”
Cryptocurrency entrepreneur Bill Ottman, founder of the free-speech focused social network Minds.com, said that the real problem with Facebook’s project isn’t due to it being outside the government’s control, or any problem general to cryptocurrencies, but rather with the type of cryptocurrency it is shaping up to be.
“The scrutiny Libra is receiving from regulators isn’t surprising given the closed and permissioned architecture of the blockchain,” said Ottman. “It exists in a grey realm between true permissionless cryptocurrencies like bitcoin, ethereum versus central banks.”
“Regulators perceive it as a threat because it does compete with various fiat currencies. If their system was fully open from the beginning then it wouldn’t even be censorable in the first place.”
“To be fair, as a corporation they do have a legal responsibility to perform KYC/AML, but that’s because of the way it’s been positioned in the first place. Bitcoin was released by Satoshi Nakamoto anonymously and therefore there’s no company to even perform anti-money laundering processes.”
“The Minds utility token, which users earn daily for contributions and runs on the Ethereum blockchain is completely different in that one token is pegged to 1,000 ad impressions, not the dollar.”
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