Since Facebook’s announcement of Libra, the project has come under scrutiny in the media and from various concerned authorities. A number of issues, especially about Facebook’s past controversies regarding user data, have been raised against Libra.
Switzerland’s data privacy watchdog said that Facebook Inc’s (FB.O) Libra project has not responded to the regulator’s requests for information. The regulatory body requested more details about Libra to enable the body to define its oversight role over the cryptocurrency project.
Facebook and a host of its partners announced the project Libra in June and plans to launch it in 2020. The American social media giant is branching into e-commerce and digital assets through Libra. As soon as the project was announced, it grabbed the headlines and it faced intense scrutiny from regulators, central bankers and politicians. The fear expressed by all these parties is that Libra has the potential to completely disrupt the financial systems of the world as we know them. There are also concerns that through trading cryptocurrencies, criminal enterprise can be furthered and given Facebook’s reach, it would amplify that problem. The more people are able to buy cryptocurrencies the higher the chances of them being used for illegal activity.
The Swiss regulator is seeking the information because the Libra Association, a nonprofit set up by Facebook to oversee the Libra project, is based in Geneva. In a U.S senate hearing earlier this July, David Marcus, Facebook’s appointed head of Libra, told the senate that he expects the Swiss Data Protection and Information Commissioner (FDPIC) to be Libra’s privacy regulator. The FDPIC says that they sent communication it the Libra Association on the 17th of July because they had received no communication from the crypto project.
The FDPIC expects Libra to conduct an impact assessment of the data protection risks that come with their proposed project. There also needs to be a look at the risks that come with cryptocurrency, evaluation of these risks and a proposal on how the project intends to minimize these risks.
In its statement, the Swiss data privacy watchdog said that it has not received any indication of what personal data will be processed through Libra. The regulator added that the Libra Association should provide information about the current status of the project to enable the FDPIC to assess the extent to which it’s advisory competences and supervisory powers would apply.
At the time of print, the FDPIC said that they are currently waiting for a response from the Libra Association. According to Marcus, the Libra Association has held talks with the Swiss Financial Markets Supervisory Authority. These talks were held in a bid to form an appropriate regulatory framework.
The scrutiny faced by Libra has mainly come from Facebook’s previous criticism with regards to how it handles user data. The U.S company has apparently executed a sweeping settlement to the amount of $5 billion for the allegations that it mishandled user privacy. The U.S Federal Trade Commission is set to make an announcement regarding this settlement according to people briefed on the matter.