Speaking at Tuesday’s congressional hearing held by the Committee on Financial Services, Congressman Brad Sherman of California told members of the U.S. Securities and Exchange Commission (SEC) to do everything in their power to stop Facebook’s digital asset Libra, which he dubs the “Zuck Buck” in honor of the tech giant’s CEO Mark Zuckerberg.
The hearing, entitled “Oversight of the Securities and Exchange Commission: Wall Street’s Cop on the Beat,” included presentations from each of the SEC’s five commissioners: Chairman Jay Clayton, Commissioner Robert J. Jackson Jr., Commissioner Hester M. Peirce, Commissioner Elad L. Roisman and Commissioner Allison Herren Lee.
The hours-long hearing covered the development of Facebook’s Libra, a new cryptocurrency, and Calibra, a digital wallet to store the cryptocurrency which is designed to be blockchain-based, backed by a reserve of assets and governed by the Libra Association, an independent, not-for-profit organization headquartered in Geneva, Switzerland that is currently comprised of Facebook and 27 other organizations.
Sherman, a crypto skeptic, called for it to be shut down. He also restated his position on cryptocurrencies, calling them ideal devices for criminals, terrorists and tax evaders.
“The Chair talked about cryptocurrency and I do have a few comments. The US dollar is an extremely good currency, a medium of exchange, a store of value. It fails, however, to meet the needs of tax evaders, terrorists, sanctions evaders and drug dealers.
Hence, there’s a market for an alternative based on those four markets. And the tax-evader market is the giant share of that market.
The SEC is going to have to construe laws, and one principle of construing laws is to do so in the public interest. It is not in the public interest for you to facilitate the creation of a device chiefly used by tax evaders, terrorists and sanctions evaders.
It is pretty clear that the Libra will be a mutual fund. I would put it – Mark Zuckerberg has a lot of money but he doesn’t have the power to print more. He will have that power if Libra fulfills all of its expectations. It will be called ‘Libra’ by them. I call it the ‘Zuck Buck’ from Mr. Zuckerberg.
Please do what you can to stop this. It meets no need for anyone who wants to follow our laws. And if you read the statement of those who want to disempower the federal government, they are thrilled with cryptocurrency and each of its developments.”
Despite Sherman’s comments, Sigal Mandelker, Under Secretary of the Treasury for Terrorism and Financial Intelligence, recently confirmed that criminal use of crypto assets pales in comparison to cash.
In a speech at the International Conference on Counterterrorism, Mandelker said,
“While most terrorist groups still primarily rely on the traditional financial system and cash to transfer funds, without the appropriate strong safeguards cryptocurrencies could become the next frontier.”
You can check out the full hearing and Sherman’s statement here.