Senators pressure Facebook to ‘immediately discontinue’ Novi wallet pilot

Published at: Oct. 20, 2021

Five senators have called for the immediate closure of Facebook’s new crypto wallet just hours after it was launched in a partnership with Coinbase.

Crypto skeptic Senator Elizabeth Warren was one of the five urging Facebook CEO Mark Zuckerberg to “immediately discontinue” the project. In a letter sent to Zuckerberg on Tuesday, the five senators wrote:

“Given the scope of the scandals surrounding your company, we write to voice our strongest opposition to Facebook’s revived effort to launch a cryptocurrency and digital wallet, now branded ‘Diem’ and ‘Novi,’ respectively.”

Diem is Facebook’s ambitious stablecoin project, formerly known as Libra, which has been the subject of heavy scrutiny and regulatory roadblocks for years resulting in a number of key partners pulling out of the venture. Novi is the firm’s crypto wallet, designed to hold the Diem token and other stablecoins.

Novi launched a pilot in the United States and Guatemala on Tuesday in partnership with Coinbase, which will provide crypto custody services. The pilot will enable users to acquire, send and receive Pax Dollars (USDP) through their Novi account.

On Wednesday, Coinbase CEO Brian Armstrong congratulated David Marcus, co-creator and a board member of Diem, adding, “It takes a lot of perseverance to ignore the haters and ship.”

The shot across the bow came from the office of Senator Brian Schatz and was co-signed by Tina Smith, Richard Blumenthal, Banking Committee Chairperson Sherrod Brown and Senator Warren.

They stated that Facebook has repeatedly made conscious business decisions to continue with “actions that have harmed its users and the broader society,” adding:

“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.”

Related: One currency to rule them all: Facebook’s Diem has global ambitions

In a letter from the company announcing the pilot, Marcus stated, “We intend to migrate Novi to the Diem payment network once it receives regulatory approval.”

The firm has far loftier ambitions than just a crypto wallet and stablecoin in the digital space. On Sunday, Facebook revealed plans to create 10,000 high-skilled jobs in the European Union over the next five years to build its own metaverse.

Tags
Regulation
Stablecoin
Wallet
Facebook
Mark Zuckerberg
Related Posts
EToro: Facebook Should Drop Libra and Support Third-Party Stablecoins
Blockchain researchers at online brokerage eToro have argued that Facebook should look to support third-party stablecoins, not Libra. According to a Nov. 28 report from Finextra, eToro’s blockchain research unit eToroX Labs believes that while Facebook’s crypto project offers a “trailblazing opportunity” to disrupt financial services worldwide, the social media giant needs to change its strategy to assure success. Facebook should focus on wallet infrastructure Distrust and forceful opposition have plagued Facebook’s project since its inception — prompting American politicians to recast Libra derisively as “ZuckBucks.” Yet eToroX Labs’ researchers argue that there is still something to fight for in …
Regulation / Nov. 28, 2019
US Congress Considers a Draft Bill Claiming Stablecoins Are Securities
United States Congress is considering a draft bill that claims all managed stablecoins must be seen as investment contracts and therefore as securities. Libra in the United States The U.S. Representative for Texas's 29th congressional district, Sylvia Garcia, introduced a draft bill to the House Financial Services Committee on Oct. 18. The draft bill, called the ‘‘Stablecoins are Securities Act of 2019,” seeks to regulate stablecoins under the Securities Act of 1933. This entails “amending statutory definitions of the term security” to include the term “managed stablecoins.” The proposed bill seems to be directed at Facebook’s Libra stablecoin, which is …
Blockchain / Oct. 22, 2019
Meta's head of crypto to step down at end of year
David Marcus, the head of Meta’s cryptocurrency and fintech unit Novi, will step down from his role by the end of 2021. Taking over from Marcus will be Stephane Kasriel, the former CEO of Upwork who has been at Meta, formerly known as Facebook, since August 2020. Marcus announced the decision via a Dec. 1 tweet, noting that he had made the “difficult decision” to leave the firm by the end of this year. The exec didn’t go into detail about what his next move would be, but hinted that it may be something “new and exciting” that he builds …
Business / Dec. 1, 2021
Vale Diem: How Facebook’s ambitious stablecoin project came to an end
On Jan. 31, Meta, formerly known as Facebook, announced that it was pulling from its stablecoin project, Diem, formerly known as Libra. Intellectual property and other assets related to the operations of the Diem Payment Network were to be sold to Silvergate Capital Corporation, essentially meaning the end to Mark Zuckerberg and his corporations’ stablecoin aspirations, at least in their current shape. This also marks the end of a once-groundbreaking initiative that was revealed in 2019 with a promise to bring a global alternative to fiat money to Facebook’s 2-billion-strong user base. Here is how this plan went from the …
Regulation / Feb. 2, 2022
Half a billion people just had their Facebook data leaked
According to a security analyst, sensitive personal information for over half a billion Facebook users was leaked on a well-trafficked hacking forum earlier today — a potential risk to millions of cryptocurrency traders and hodlers who now may be vulnerable to sim swapping and other identity-based attacks. The trove of information was first discovered by Alon Gal, CTO of security firm Hudson Rock, who posted on Twitter about the leak earlier today: All 533,000,000 Facebook records were just leaked for free. This means that if you have a Facebook account, it is extremely likely the phone number used for the …
Decentralization / April 3, 2021