Under the heading of “Prohibited Financial Products and Services,” the policy noted:
Ads must not promote financial products and services that are frequently associated with misleading or deceptive promotional practices, such as binary options, initial coin offerings, or cryptocurrency.
The policy also contained some example ads like, “New ICO! Buy tokens at a 15% discount NOW!”
Little did anyone outside of the upper echelons of the social media giant know that the company issued its policy in anticipation of introducing its own cryptocurrency, which it just did earlier this week.
Called “Libra,” the cryptocurrency was unveiled at the same time Facebook introduced a new subsidiary, Calibra, that will “oversee its interests in the cryptocurrency,” Fox Business Network reported.
Noted the technology news site Techcrunch:
Facebook has finally revealed the details of its cryptocurrency, Libra, which will let you buy things or send money to people with nearly zero fees. You’ll pseudonymously buy or cash out your Libra online or at local exchange points like grocery stores, and spend it using interoperable third-party wallet apps or Facebook’s own Calibra wallet that will be built into WhatsApp, Messenger and its own app. Today Facebook released its white paper explaining Libra and its testnet for working out the kinks of its blockchain system before a public launch in the first half of 2020.
The site noted that Facebook isn’t going to solely control Libra. Rather, the company will have a single vote regarding its governance just like the other founding members of the Libra Association. This includes Visa, Uber, PayPal and Andreessen Horowitz, each of which has invested $10 million into operations. In all, there are 27 investing companies.
The hypocrisy of Facebook’s actions did not, of course, go unnoticed. John Todaro, director of research at TradeBlock, tweeted, “Facebook is revealed to have been working on the Libra #crypto project for more than one year. So, when they banned ads for crypto platforms on Facebook in 2018, they were literally trying to prevent competition.”
Even one-time ‘enemies’ of Facebook in the cryptocurrency realm have suddenly decided to temper their opposition. That includes Cameron and Tyler Winklevoss, bitcoin entrepreneurs who, Fox Business Network reported, “signaled this week that they are ready to move past their lengthy feud with [Facebook founder] Mark Zuckerberg” after the platform has launched its own cryptocurrency.
You may have heard of the Winklevoss twins before. They sued Zuckerberg at one point for allegedly stealing the idea for Facebook from them, and while that question has never really been answered, they did win a $65 million settlement.
More than that, Fox Business Network noted further, there is a reason why they are softening their anti-Zuckerberg stance, perhaps: They were approached by Facebook earlier this year about helping to develop Libra in conjunction with their own cryptocurrency exchange, Gemini. And, in an interview with “CBS This Morning” on Tuesday, they said it made sense that there should be a level of cooperation with the social media behemoth in terms of the wider crypto market.
“There’s so much pie to grow [in the market], I mean, at this point, we need to be frenemies” with Facebook, Cameron Winklevoss noted.
But is it smart to partner with Facebook on cryptocurrency when the company a) obviously hid the fact that it was developing its own; and b) has been accused of stealing users’ private information and then selling it/sharing it with third parties willing to pay for it (political campaigns come to mind)? Can Facebook be trusted to be an honest broker, a good business partner?
And what about all of the platform’s user bans and censorship? What if one or more companies involved with Libra don’t find themselves in agreement, politically, with Zuckerberg? Will he undercut them at some point?
What makes it a volatile situation is that lawmakers are already beginning to introduce measures aimed at either punishing the social media behemoths for their breaches of privacy and user bans or fining them — or both. (Related: Dear President Trump: If you do not end censorship by Big Tech, you will lose the election and thrust America into a violent civil war.)
Neither of which would be good for investors.
In mid-May, Sen. Josh Hawley, R-Mo., demanded that Zuckerberg provide answers regarding Facebook’s push to maintain user privacy. In a letter, according to Politico, Hawley was questioning Zuckerberg’s sincerity and commitment to the hyped privacy initiative.
“You claim your goal is to limit Facebook’s window into users’ lives, but your future profits demand that you expand that window,” Hawley — who has made big tech accountability his signature issue — wrote. “The American people deserve to know how you plan to do that before they sign on to your new vision of supposedly private social engagement.”
He also noted that Facebook has become “a major online content platform” that can make or break news organizations that rely on its reach. To that end, Facebook “has not proven itself a worthy custodian,” Hawley wrote, a reference to the platform’s banning and censoring of independent and Right-leaning media.
To that end, Hawley, earlier this week, introduced legislation aimed at preventing the tech giants like Facebook from censoring conservatives and others’ speech, noting that if its permissible under the First Amendment, then it should not be blocked.
It’s under these conditions that Facebook is now a major cryptocurrency player. And somehow, we’re supposed to believe, despite all we’ve seen from the company, that it will be an honest broker.