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Facebook Defends Libra Cryptocurrency in Sometimes Hostile Senate Hearing

Ahead of the launch of its new global cryptocurrency, Facebook (FBGet Report) sent its crypto chief David Marcus to the Senate Tuesday to face questioning from the U.S. Senate Committee on Banking, Housing, and Urban Affairs.

The mixed reaction Marcus received among senators was mostly divided along party lines, with some of the toughest questioning coming from Democratic Senators still skeptical of the company in the wake of the Russian election hacking scandal that Democrats blame for their candidate’s loss in the 2016 presidential election.

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Senator Mark Warren (D-VA) stated that “Facebook has a history of buying or copying competing technologies,” before demanding that Marcus assure the panel that competing digital wallets wouldn’t be hindered on WhatsApp and Messenger, two of Facebook’s most popular products.

Marcus went back and forth with Warner before assuring Warner that users would be able to send and receive non-Libra digital currencies on Facebook’s networks. But Marcus would not commit to embedding those competing currencies on its platforms.

Senator Sherrod Brown (D-OH) baldly stated that “Facebook is dangerous,” saying that the company has continued to misuse customer data while continually referring to each instance as a “learning experience.”

Brown concluded his remarks by saying that “it takes a breathtaking amount of arrogance to look at that record” and believe that the next move for the company should be to create a digital currency.

Republican Senators were more forgiving for the most part, with Committee Chairman Mike Crapo (R-ID) applauding the company’s efforts to provide financial services for the under-banked.

“I want to make clear that we are only at the beginning of this journey,” Marcus said. “We expect the review of Libra to be one of the most extensive ever. Facebook will not offer the Libra currency until we have addressed the concerns and receive appropriate approvals.”

Marcus also stated the Calibra network will have the “highest standards” when it comes to privacy and that the social and financial data will be completely separated.

Users will have to provide an authentic government ID so sign up for Calibra and will not be able to register by simply using their existing Facebook profiles.

Marcus stressed Calibra’s independence from Facebook, stating that the company has taken the lead in developing the technology but that it would give up the lead once the digital currency is launched.

“We will not control Libra and will be one of over 100 participants that will govern over the currency,” Marcus said. ” We will have to gain people’s trust if we want people to use our network over the hundreds of competing companies.”

Facebook shares were up 0.18% to $204.27 on Tuesday early afternoon and are up more than 55% this year.

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Source: Facebook Defends Libra Cryptocurrency in Sometimes-Hostile Senate Hearing

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No End In Sight for Crypto Sell-Off as Bitcoin Breaches $4,250 – Samuel Potter & Todd White, Bloomberg

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London/Madrid: Turmoil engulfed cryptocurrency markets again on Tuesday, with every major coin extending a rout that’s rocked confidence in the nascent asset class just as US regulators try to close in on alleged fraud.

Bitcoin tumbled below $4,225 to a 13-month low, before regaining some ground. The slide helped fuel a sell-off among rival tokens Ether, Litecoin and XRP, which pared an earlier loss that reached 17%.

After months of enjoying relative stability, cryptocurrency bulls are left reeling by a sudden market downturn in November and increased regulatory reviews. Digital assets have now lost almost $700 billion of market value since crypto-mania peaked in January, according to CoinMarketCap.com. Trading on futures markets, where investors can bet against Bitcoin, has soared.

While the trigger for the latest sell-off is unclear, it has coincided with a “hard fork” of Bitcoin Cash. The move, which split the offshoot of the original Bitcoin into two, has underscored the sometimes chaotic nature of a crypto community racked by infighting. Bitcoin, which began the year above $14,000, broke through its floor of around $6,000 last week.

“If you significantly slice through a level like $6,000, people don’t have a lot of protection below it — and then you see a lot of stop-loss selling which exacerbates the move,” said Marc Ostwald, global strategist at ADM Investor Services International in London. “It doesn’t help that we have a genuinely risk-averse environment, with equities and credit under pressure.”

Bitcoin, the biggest digital coin, was down 7.9% as of 7:12am in New York. Ether, Litecoin and XRP all fell at least 8.8%.

Regulatory concerns have also weighed on sentiment. On Friday, the US Securities and Exchange Commission announced civil penalties against two cryptocurrency companies that didn’t register their initial coin offerings as securities. And on Tuesday, Bloomberg reported that the US Justice Department is investigating whether last year’s epic rally was fuelled in part by manipulation, with traders driving up Bitcoin with Tether — a popular but controversial digital token.

“The whole move by the SEC has seemed like a nail in the coffin, and with talk about price-rigging the market, it’s getting nasty,” said ADM’s Ostwald. He said the approach of Bitcoin futures expiration can also give gyrations to the market.

The combined open interest in Bitcoin futures on exchanges run by CME Group Inc. and Cboe Global Markets Inc. swelled to the equivalent of 22,266 Bitcoins on Monday, an all-time high. CME’s current contract is set to finish trading in 10 days. Volume in the contracts, which allow institutional investors to profit from declines in cryptocurrencies, jumped to the highest level since July.

Judge Sets Bail At $750,000…In Cryptocurrency – Nathan Graham

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Martin Marsich, a Serbian and Italian national, is currently awaiting trial for allegedly hacking the computer network of San Francisco-based video game company, Electronic Arts. Surprisingly, Marsich has been ordered to post bail using cryptocurrency, according to an official statement by the US Attorney’s Office. Marsich was arrested at the San Francisco International Airport on August 8 and made his first appearance in federal court on August 9. He is charged with “illegal intrusion” into the Electronic Arts internal computer network…..

Read more: https://www.ethnews.com/judge-sets-bail-at-750-000-in-cryptocurrency

 

 

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