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Zuckerberg stands before Congress on Facebook Libra questioning

By Ramla Soni

Facebook founder asserts that the Facebook Libra currency will not launch without US regulatory approval

Zuckerberg stands before Congress on Facebook Libra questioning

Facebook founder Mark Zuckerberg has reassured the House Committee on Facebook’s Libra that the currency will not launch without US regulatory approval.

Maxine Waters, chair of the House Financial Services Committee, opened the proceedings by arguing that Facebook needs to focus on addressing “existing deficiencies and failures” before launching Libra.

She also mentioned Facebook’s decision to exempt politicians’ content and adverts from fact checking which will allow politicians to “lie and mislead… the American people” using the platform, while raking in advertising funds for the company.

Mr Zuckerberg delivered his opening statement focussing on Libra.

He said that he understands that he is not the “ideal messenger for this right now” but that the “financial industry is stagnant. There is no digital financial architecture to support the innovation that we need.”

He added: “I don’t know if Libra is going to work, but I believe in trying new things.”

Congresswoman Nydia Velazquez from New York then pointed to Facebook going back on a promise to not integrate the WhatsApp messaging system with Facebook. She said to Mr Zuckerberg "Do you understand why this record makes us concerned about Facebook entering the cryptocurrency space?"

She asked whether Mr Zuckerberg would you commit to a moratorium on Libra until Congress has had the opportunity to work on a legal framework to provide to the regulators.

In reply, Mr Zuckerberg said: "Congress exercises significant oversight through these committees ..." until Ms Velazquez cut him off saying: “So that is a no”.

When asked about privacy and trust, Mr Zuckerberg said major change was in progress. He said

Facebook is setting up a new privacy programme that is equivalent to “what the Sarbanes-Oxley requirements would be for a public company on people's financial data”.

This would mean regular data "audits", and reporting on these audits up to Mr Zuckerberg.

In relation to the rise in Chinese technology companies, Mr Zuckerberg said: “Today, six out of 10 of the top tech companies are coming out of China and certainly don’t share our values.”

In terms of regulation, Mr Zuckerberg said Facebook would be forced to leave the Libra association if it did not receive approval from US regulators.

He was then asked what would happen if the other members of the association, which currently includes 21 companies and non-profits, vote to proceed with the project without receiving US regulatory approval.

Mr Zuckerberg, who said previously that Facebook would not launch Libra without US regulatory approval, replied, “Then we would probably have to leave the association."

Topics like deprivation of credit through redlining and the possibility of Facebook situating Libra in Switzerland were also covered in the session.

Prior to the event, Facebook shares were 0.9 per cent higher within the first half-hour of trade in New York.

The shares in the company later hit an intraday high as Mr Zuckerberg addressed a series of five-minute Q&A sessions with House Committee members.

Shares were as much as 1.8 per cent higher, and breaking past the stock's previous intraday high 10 minutes after opening bell.

Shares were up 1.5 per cent at $185.11 at pixel time. Facebook shares are up just over 40 per cent in 2019.

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