Author: Paul Vigna
Facebook's plan to release its own currency, called Libra, has sparked a range of concerns among lawmakers.
WSJ’s Paul Vigna explains.
Photo: Andrew Harrer/Bloomberg News
Lawmakers were up in arms this month about whether Libra, Facebook Inc.’s proposed new cryptocurrency, would be a haven for money launderers and other criminal activities.
Facebook, though, says Libra could be a valuable tool for law enforcement, partly because of the vast amounts of information that will be generated about its users. That was the message Facebook executive David Marcus took to Congress during hearings this month.
The conversation represents how some portions of the crypto world are trying to move beyond the industry’s Wild West heyday and become a viable payments option.
The ability to use crypto to help catch criminals is ingrained in its structure. Cash is valuable to criminals because there is no transaction or ownership record. Bitcoins carry an unalterable transaction record with them, but not always an ownership record. With Libra, both the transactions made and who made them will be recorded.
“You’re going to see an expansion of exchanges and wallet services that have stronger (anti-money-laundering) protocols and restrictions,” said Yaya Fanusie, a former CIA analyst and security consultant. “That would be good for law enforcement.”
Mr. Marcus implied in his testimony on June 17 that law enforcement could have access to that information when needed.
Facebook and the nonprofit group that will govern Libra, the Libra Association, will impose rules on the companies that use the network. Companies like exchanges and wallet providers that want to use the Libra network will have to comply with regulations around money laundering. That is something that can’t be forced on the bitcoin network, where there is no one party or group controlling access.
“I believe that we can improve on the current system,” Mr. Marcus told Congress in his recent testimony. “I think this system might be potentially better.”
Facebook declined to comment beyond the testimony given by Mr. Marcus. The Libra Association also declined to comment.
Read More: Here