Posted on

Ocasio-Cortez Criticizes Corporate-Controlled Money in House’s Libra Hearing

Congresswoman Alexandria Ocasio-Cortez highlighted the idea of scrip in today’s Libra hearing, remarking that it is destabilizing.

New York Congresswoman Alexandria Ocasio-Cortez addressed the control of Facebook’s Libra cryptocurrency in today’s United States House Committee on Financial Services hearing.

As per a recording of the event, provided by C-Span on July 17, Ocasio-Cortez addressed Calibra wallet CEO David Marcus, asking, “[Facebook] wants to establish a currency and act through its wallet as — at minimum — a payment processor. Why should these activities be consolidated under one corporation?”

Regarding the membership of the Libra Association, Ocasio-Cortez asked, “Were they [the members] democratically elected?” After Marcus answered that it was not, but was governed by membership standards, Ocasio-Cortez summed up Libra as “a currency controlled by an undemocratically-selected coalition of largely massive corporations.” 

From the issue of corporate control, the representative pivoted to an issue of monetary policy saying:

“You stated yesterday in front of the Senate Committee that you would be open to accepting 100% of your pay in Libra. In the history of this country, there is a term for being paid in a corporate-controlled currency … It’s called ‘scrip.’ The idea that your pay could be controlled by a corporation instead of a sovereign government. Do you think that there is any risk here? We’ve seen from scrip, to the issues with how Facebook handled our elections, we’re seeing a destabilizing in our public goods.”

Company scrip has been illegal as a form of payment in the U.S. for almost a century, as they were discluded from counting as “proper mediums of payments” with the Fair Labor Standards Act of 1938. 

Ocasio-Cortez also questioned Marcus’ view on whether Libra, as well as currency in general, should be a public good. Marcus said that “sovereign currency should remain sovereign,” and stated it was not his place to determine whether Libra should be a public good.

As previously reported by Cointelegraph, JPMorgan Chase CEO Jamie Dimon claimed that Libra will not be a threat to the financial giant in the foreseeable future.

Posted on

Key Comments From Libra Hearing at US House of Representatives

Legislators in the U.S. House of Representatives heard testimony on Facebook’s Libra cryptocurrency project. Here are some key comments from lawmakers and David Marcus.

The United States House of Representatives Financial Services Committee heard testimony from from Facebook’s David Marcus, today July 17. Marcus, the CEO of the Calibra wallet service for the social media giant’s forthcoming Libra stablecoin, attempted to assuage regulators’ concerns regarding the project and educate lawmakers on its purpose and potential. Cointelegraph has compiled some key quotes from the hearing, which you can view here.

[2:50] Rep. Maxine Waters, chair of the Financial Services Committee: “Demonstrated pattern of failing to keep consumer data private on a scale similar to Equifax… Facebook also allowed malicious Russian state actors to purchase and target ads”.

[5:40] Rep. Patrick McHenry: ”We’re here to go beyond the headlines… Washington must go beyond the hype to ensure that we are not the place where innovation goes to die.”

[13:49] David Marcus: “That’s what Libra is about: developing a safe, secure and low-cost way for people to send money around the world.”

[27:] McHenry: “Why are you doing this in Switzerland and why are you using a basket of currencies? Why not the good old American dollar”

Marcus: “…The choice of Switzerland has nothing to do about evading responsibilities or oversight. The goal of Switzerland is to home this Libra in an international place…” 

[0:40:10] Rep. Nydia Velasquez: “Will you commit yourself to not launch before all the concerns from the Federal Reserve and all the regulators are addressed?”

Marcus: “Absolutely Congresswoman and I want to reiterate this commitment that this was the spirit in which we announced early…”

[1:01:51] Rep. David Scott: “Neither your white paper nor your subsequent Facebook post offered any concrete details as to how you plan to implement or enforce strong Anti-Money Laundering, how you plan to enforce Know Your Customer protections, and most importantly, to ensure — and that’s what all of us are concerned about — the safety of our financial system.[…] what do you see as the responsibilities of Libra to combat money laundering, to protect our financial system?”

Marcus: “[Libra] will have an AML program and will have guidelines for all the members to enforce the AML, KYC, CFT standards. […] Blockchain gives additional information to law enforcement and regulators compared to our current system.”

Scott: “What are you anticipating as some of the new ways that criminals may attempt to export and exploit Libra for illicit use and how are you combating [this]?” 

Marcus: “I couldn’t agree more with you Congressman, and I believe that we can improve on the current system because we have a chance this time around to think through how the network is designed, the way that the on and off ramps are properly regulated with proper KYC controls, the proper way to monitor new activity and report it with new technologies and I think this system might be potentially better on these fronts.”

[1:17:44] Rep. Sean Duffy: “Who gets to use Calibra and Libra? 

Marcus: “Anyone that can open an account, goes through KYC, in countries where we can operate.”

Duffy: “Who can use a $20 bill? […] This $20 bill doesn’t discriminate on anything you can be a murderer say horrible things, you can say great things. This $20 bill can be used by every single person that possesses it. With regard to your network, can Milos Yianopolous and Louis Farrakhan use Libra?” [both have been banned from FB]

Marcus: “I don’t know yet, congressman.”

[1:33:00] Rep. Brad Sherman: “We need to get Mr. Zuckerberg here. This is the biggest thing or this tries to biggest thing this committee will deal with this decade […] Now we’re told by some that innovation is always good, the most innovative thing that happened this century is when Osama bin Laden came up with the idea of flying two airplanes into the twin towers. That’s the most consequential innovation, although this will do more to endanger America than even that […] If cryptocurrency is used to finance the next horrific terrorist attack, 100 lawyers standing in a row, charging $200,000 an hour, are not going to protect his [Zuckerber’s] rear end from the wrath of the American people.”

[2:37:00] Rep. Ayanna Pressley: “It is long past time that we stop compromising consumers’ privacy in pursuit of profit. […] Would you trust your money with a company who essential admits it’s just winging it?”

[2:50:00] Rep. Alexandria Ocasio-Cortez: “I believe we’re here today because Facebook, which is a publishing platform, an advertising network, a surveillance corporation, a content distributor now always wants to establish a currency and act through its wallet as at minimum a payment processor. Why should these activities be consolidated under one corporation?”

Marcus: “The one thing we are focused on is solving problems for the very people who are left behind right now and we believe it’s important because we have the ability to invest and the products to deliver those services that will solve problems.”

[3:11:30] Madeleine: “No, we do need to trust you. We absolutely need to trust you […] Could you be specific as to the wrong-doing that generated a $5 billion fine? It’s tough to trust when the collection, storage and misuse of the information of your customers generated a $5 billion fine.”

Posted on

Jamie Dimon Says Libra Does Not Pose a Threat in Short Term

Jamie Dimon says that he would not spend too much time on Libra as the coin does not pose a threat in the foreseeable future.

Jamie Dimon, CEO of global financial services firm JPMorgan Chase, argued that Facebook’s cryptocurrency project Libra does not pose a threat in the foreseeable future.

As reported by CNBC, Dimon delivered his comments during a conference call with analysts on Tuesday, July 16. Dimon said that he would not spend too much time on Libra, specifying that “to put it in perspective, we have been talking about blockchain for seven years and very little has happened. We are going to be talking about Libra three years from now.”

Dimon continued saying that any new effort will have to comply with the industry’s Anti-Money Laundering provisions. Dimon said:

“We don’t mind competition. The request is always going to be the same: We want a level playing field. And governments are going to insist that people who hold money or move money all live according to rules where they have the right controls in place; no-one wants to aid and abet terrorism or criminal activities.”

Dimon’s statements come on the heels of a press conference from United States Treasury Secretary Steven Mnuchin, who spoke about the use of cryptocurrency to finance illicit activity, and the role of regulations with respect to crypto-dealing organizations. Mnuchin said:

“Cryptocurrencies such as Bitcoin [BTC] have been exploited to support billions of dollars of illicit activity, like cybercrime, tax evasion, extortion, randomware, illicit drugs, human trafficking […] This is indeed a national security issue.”

JPMorgan itself is reportedly expecting to pilot its own digital token dubbed JPM Coin by the end of 2019. Umar Farooq, head of digital treasury services and blockchain at JPMorgan, stated that the bank’s stablecoin has the potential to enable instant delivery of bonds via blockchain.

Posted on

Overstock Subsidiary and Tokenization Firm tZERO Announces New Management

The tokenization firm tZERO has announced three new executive appointments, including a former Barclays member who will head tokenization dealings.

The blockchain-based subsidiary of retail giant Overstock,  tZERO, has appointed three new managers. The company announced the new hires in a press release on July 17.

According to the announcement, new appointees Brooke Navarro, Michael Mougias and Alexandra Sotiropoulos have been official managers since July 15. TZero states that these new executives are the firms head of issuance, head of investor relations and head of communications, respectively.

The CEO of tZERO, Saum Noursalehi, remarked on the intended role for these new hires, saying:

“On the issuance front, Brooke will drive strategic development of our security token ecosystem by focusing on the supply-side of the equation — working with issuers to bring more quality assets to the PRO Securities ATS. Mike and Alex will spearhead our efforts to continue to develop strategic market positioning for tZERO and engage with current and prospective investors, analysts, media and other tZERO stakeholders.”

Brooke Navarro will coordinate with regulated broker-dealer affiliates and partners to seek out companies interested in a token offering or otherwise tokenizing existing capital tables. Navarro is also going to be in charge of pursuing strategic partnerships in order to drive adoption of tZERO’s technology.

Navarro was formerly a managing director in investment banking at Barclays as a leader in the company’s technology, media and telecom equity capital markets team. Navarro reportedly acted as an advisor to Barclays clients for initial public offerings, follow-ons, convertibles and private placements.

As previously reported by Cointelegraph, tZERO partnered with the producers of a gaming biopic in development — “Atari: Fistful of Quarters” — to tokenize the film. The token is called “Bushnell” and token owners will become shareholders of the project, and receive a portion of the movie’s profits as such. Token holders will also apparently be able to vote on the movie trailer and have influence over which actors are hired.

Posted on

Cryptocurrency Grin Follows Through With Anticipated July 17 Mainnet Hardfork

The cryptocurrency Grin has followed through with stated plans to hardfork its mainnet on July 17, as part of an ongoing effort to prevent ASIC mining.

Privacy-focused cryptocurrency Grin has completed the first hardfork so far on its mainnet. The fork occurred at block height 262,080 on July 17, as shown on the Grin block explorer Blockscan.  

According to an official announcement from Grin core dev Quentin Le Sceller, the latest blockchain hardfork is designed to discourage Grin mining through dedicated application specific integrated circuits (ASICs) and also includes a new iteration of its “bulletproof rewind scheme” for Grin wallets.

As previously discussed by Cuckoo Cycle author John Tromp, there is reportedly no sign of users deploying ASICs to mine Grin yet; however, Grin’s secondary Proof-of-Work scheme Cuckaroo29 is intended to be continually iterated upon in order to prevent ASIC mining:

“In the 133 days of Grin mining so far, there is no sign of any ASIC mining. We do know of several ASIC products planned to come out in summer. To the extent that any such ASICs have built in support for Cuckaroo29, we want our tweak to brick that support.”

As previously reported by Cointelegraph, Grin proposed the mainnet hardfork for the aforementioned height and date on June 5. Grin has also planned to continue hardforking its mainnet at regular intervals, with each fork occurring approximately once every six months upon reaching 262,080 new blocks. 

As these are hardforks, previous transactions on the blockchain will no longer be recognized whenever a new mainnet version is launched. Additionally, Grin apparently uses the “Mimblewimble” protocol, a cryptographic protocol named after a tongue-tying curse from the popular Harry Potter fantasy series. This protocol reportedly allows for transactions to be obfuscated, with the upshot of maintaining user privacy and guarding against double spending.

Posted on

CNBC: Facebook Has Not Contacted Swiss Regulators On Libra’s Registration

A spokesman for the Swiss Federal Data Protection and Information Commissioner says that Facebook has not contacted it regarding Libra.

Social media giant Facebook has reportedly not contacted Swiss regulators regarding the registration of its long-awaited cryptocurrency project Libra.

On July 16, Hugo Wyler, a spokesman for and head of communication at the Swiss Federal Data Protection and Information Commissioner (FDPIC), told CNBC that the agency has not been contacted by the promoters of Libra. Notably, the Libra project’s head, David Marcus mentioned in his testimony that the FDPIC would be the Libra Association’s privacy regulator:

“For the purposes of data and privacy protections, the Swiss Federal Data Protection and Information Commissioner will be the Libra Association’s privacy regulator.”

Wyler said that “we have taken note of the statements made by David Marcus, chief of Calibra, on our potential role as data protection supervisory authority in the Libra context. Until today we have not been contacted by the promoters of Libra,” and further added:

“We expect Facebook or its promoters to provide us with concrete information when the time comes. Only then will we be able to examine the extent to which our legal advisory and supervisory competence is given. In any case, we are following the development of the project in the public debate.”

U.S. lawmakers are wary of a foreign-regulated coin

At a hearing today with the United States House of Representatives Financial Services Committee, Rep. Patrick McHenry asked Marcus why Facebook wanted to have its project based in Switzerland, to which Marcus responded that it was an “international place” conducive to doing business. 

Rep. Josh Gottheimer expressed his own concerns as to why Facebook has decided to go abroad, to which Marcus said, “Again, the choice of Switzerland — nothing to do with evading regulations or oversight.”
Marcus assured Rep. Bill Huizenga that Facebook had indeed been in touch with the Financial Market Supervisory Authority, a Swiss financial regulator. Marcus further underlined that Facebook would not launch the Libra cryptocurrency project before they received the go-ahed from all relevant regulatory authorities.

Posted on

Huobi Transitions From Current HUSD System to New ERC-20 Token

In the coming days, Huobi will change over from its current HUSD system to the new ERC-20 token.

Huobi cryptocurrency exchange will transition its HUSD token from its current stablecoin system to an ERC-20 token through a partnership with crypto startups Stable Universal Limited and Paxos Trust Company.

Per a press release published on July 17, Stable Universal will develop a new ERC-20 HUSD Token, which will be pegged to the United States dollar and held in reserve by the New York State Department of Financial Services-regulated custodian Paxos. Huobi will be the first platform to list HUSD Token.

In the coming days, Huobi will change over from its current HUSD system to the new ERC-20 token, which will subsequently be available on other cryptocurrency exchanges, wallets and platforms.

Throughout the process, Stable Universal will let users purchase HUSD on a one-for-one basis for U.S. dollars, while Paxos will manage the Know Your Customer and Anti-Money Laundering procedures for account openings on Stable Universal. Additionally, Stable Universal will work with third parties to conduct smart contract audits and on-chain transaction monitoring.

Richmond Teo, Paxos co-founder and CEO of Paxos Asia, said that “we are proud to now offer trust-as-a-service to power HUSD Token, a new stablecoin for Huobi Global. This is a new model that allows other innovators to create safe, trusted and fully-backed solutions that support wider crypto-market adoption for cash and assets using our unique regulated status.”

In late June, Huobi announced that it will be moving aggressively to the Turkish market over the next 12 months, since the country has a “very important and promising prospective market.”