House committee wants Zuckerberg, Sandberg to testify on Libra

Copyright 2019 CNN

Copyright 2019 CNN

(CNN) - Congress is concerned about Facebook's Libra cryptocurrency, and one committee wants to question the folks in charge: Both Mark Zuckerberg and Sheryl Sandberg have been asked to testify before the House Financial Services Committee about Facebook's plans for Libra.

A hearing with Sandberg, Facebook's chief operating officer, could come as soon as the end of October, though the committee is waiting to confirm it until CEO Mark Zuckerberg agrees to testify in a separate hearing, according to a congressional source. Rep. Maxine Waters, the committee's chairwoman, has called for Zuckerberg to testify by January, the source said.

Members of the committee have for months wanted to hear from Zuckerberg about Libra, a currency that Facebook hopes will become the basis of a new global financial system. They also plan to ask about other Facebook-related topics beyond Libra, such as privacy and fair housing issues, the source said. Zuckerberg spent three days in September visiting Capitol Hill and with lawmakers — including members of the House Judiciary Committee, which is conducting an antitrust investigation of tech companies — and President Donald Trump to discuss such issues as avoiding foreign interference in the 2020 elections.

Announced in June, Libra is a digital currency that would allow users to easily and cheaply send money around the world from digital wallets on their smartphones, with no need for a bank. Facebook has said Libra will be governed by an independent, third-party organization, the Libra Association, though many of that group's member companies have ties to Facebook.

The project drew almost immediate opposition from regulators around the world, who expressed concerns that Libra could grow to rival government-backed currencies, such as the dollar, and the power of the central banks that control them. They also worry the project could threaten consumer privacy, or enable the financing of terrorism or drug or human trafficking.

Facebook and the Libra Association have promised not to launch Libra until these regulatory concerns are addressed.

Facebook's David Marcus testified in July at two contentious hearings before the House Financial Services and Senate Banking committees. He led the Libra effort at Facebook and now runs the company's subsidiary developing a digital wallet for the cryptocurrency. Marcus is also among the few initial leaders of the Libra Association.

Even after that hearing, many lawmakers were not satisfied.

"I think that he skirted some of the most significant questions," Waters said in an interview with Bloomberg TV following the July testimony, later adding, "I don't know what it is, I don't know how it works." Waters called on Zuckerberg to testify on the project.

"He should be here," she said in the interview. "That's one of the things we have to do. This is a big idea that's borne out of Facebook. If he's big enough to create an idea that's global in nature, then he should be big enough to come and talk to us about it."

Prior to the July Libra hearings, Waters asked Facebook to halt Libra's development until regulators have had a chance to address it, something the company has not agreed to. She also proposed draft legislation that would ban big tech companies from operating cryptocurrencies.

The project continues to move ahead — the Libra Association launched a "bug bounty" program, inviting the public to identify flaws in its system, and Facebook has hired lobbyists to address crypto-related issues with lawmakers, lobbying disclosure forms show.

Lawmakers have also advanced their efforts to address the digital currency. In August, Waters led a Congressional delegation to Switzerland, where the Libra Association is headquartered, to learn how it will be regulated. That same month, privacy regulators from around the world — including FTC Commissioner Rohit Chopra — sent a letter to the Libra Association companies asking how Libra users' privacy will be protected.

The Libra Association and Facebook declined to comment for this story.

CNN Business' Donie O'Sullivan contributed reporting.

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