July 16, 2019

Cortez Masto Questions Facebook about Digital Currency Guardrails, How It Will Combat Money Laundering

Facebook Digital Currency Hearing

Washington, D.C. – At a hearing of the Senate Banking Committee, U.S. Senator Catherine Cortez Masto (D-Nev.) questioned David A. Marcus, head of Calibra, Facebook’s new digital currency subsidiary, about how the company will combat money laundering and terrorism financing.

“One [concern] for me, in particular, is something I’ve dealt with as Attorney General of the state, which is the issue of money laundering. I know there’s clear regulatory oversight that we have right now to address the issue of money laundering that comes in so many forms, but one of them is terrorist financing that money laundering supports. My question to you is, how will the Libra association itself be insuring that it is guarding against money laundering activity? Have you thought about that?” asked Senator Cortez Masto.

Marcus responded, “The way we’re thinking about protecting the integrity of the network from money laundering, criminal activity, terrorist funding is by not only moving a lot of cash transaction in the digital world. Cash transactions is where most crimes currently happen. [W]e believe that if a lot of transactions move to digital, it will be better. And the way that we are applying [anti-money laundering] programs in that, as far as the Calibra wallet is concerned, we will have strong identity. For every new Libra account, you will have to upload government-issued ID and authenticate, and as a result, we’ll have AML programs on the Calibra wallet. As far as the Libra network is concerned, we will have an AML program as well. Despite the fact that the Libra Association [is] based in Switzerland, it will register with [the Financial Crimes Enforcement Network] and have to comply with AML and [know your customer] practices.”

“I appreciate you providing more transparency around that. Let me just say this is a new day and age when it comes to cash and carrying around a briefcase of cash; transnational criminals and terrorists don’t do that anymore. And what you’re creating right now is an opportunity for them to engage in money laundering and criminal activity, so know that. To say that we’re complying with AML activities is one thing – I want to see the specifics of it,” the senator said.

Full video is of this exchange is available here.