Facebook and regulators seems like they can’t get enough of each other. Facebook has been dealing with a lot of regulatory pressure due to the continued scandals, leaks, etc. And recently Facebook CEO, Mark Zuckerberg, received a letter from the Senate banking committee requesting details of Facebook’s upcoming cryptocurrency payment system. All of this started after a Washington Post article revealed that Facebook is working on the project.
The genesis
The Senate banking committee’s obsession with payment gateways and privacy concerns started after the Equifax hacks and data leak. Until then, this was the sphere of least interest. “In the year and a half since the Equifax breach, the country has learned that financial and technology companies are collecting huge stockpiles of sensitive personal data, but fail over and over to protect Americans’ privacy. Outdated privacy laws don’t address the complex surveillance schemes these businesses profit from today,” said Brown, a member of the Senate banking committee. Given the exponential growth and use of data, and the corresponding data breaches the government should especially be worried about what data is contained in modern consumer reports, how the information is gathered, who compiles it, how it is protected, how consumers can access it and correct it, and how privacy is respected.
Tough questions
The letter was basically a set of seven question, to which the committee was seeking answer from the CEO of Facebook.
New regulations?
The committee aims to achieve the following goals after such inquiries and consultations.
All of this started after a Washington Post article. It should be kept in mind that the company has not even officially confirmed the project. Internet tech giants have a lot of projects they try out, many of them outlandishly infeasible but nevertheless only a few make it to real-world application. A company like Facebook will never go into releasing a product without required regulatory approval. This goes to show the level of paranoia that US regulators have when it comes to dealing with crypto. They should have at least let Facebook make a formal submission for regulatory approval before asking such questions. The planning is still still on the drawing board and the product might end up being totally different when it gets released. This a clear overstepping of jurisdiction, the request doesn’t even mention under what law or statute is the request being made, put simply we have no idea how such a request can be made to a company in such a manner. How the committee has jurisdiction in this matter other than the sharing of information with financial companies is unclear.
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