By The Seattle Medium

WASHINGTON – Last week, Congresswoman Maxine Waters (D-CA), Chairwoman of the House Financial Services Committee; Congresswoman Carolyn Maloney (D-NY), Chair of the Investor Protection, Entrepreneurship and Capital Markets Subcommittee; Congressman William Lacy Clay (D-MO), Chairman of the Housing, Community Development and Insurance Subcommittee; Congressman Al Green (D-TX), Chairman of the Oversight and Investigations Subcommittee; and Congressman Stephen F. Lynch (D-MA), Chairman of the Task Force on Financial Technology, wrote a letter to Mark Zuckerberg, Founder, Chairman and Chief Executive Officer of Facebook; Sheryl Sandberg, Chief Operating Officer of Facebook; and David Marcus, Chief Executive Officer of Calibra, requesting an immediate moratorium on the implementation of Facebook’s proposed cryptocurrency and digital wallet.

“Because Facebook is already in the hands of over a quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action,” the lawmakers wrote.“During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.”

This letter comes on the heels of Chairwoman Waters’ initial request for Facebook to agree to a moratorium in June.

The Chairwoman has also announced plans to convene a full Committee hearing entitled, “Examining Facebook’s Proposed Cryptocurrency and Its Impact on Consumers, Investors, and the American Financial System” on Wednesday, July 17.

See full text of the letter below.

July 2, 2019

Mark Zuckerberg
Founder, Chairman and Chief Executive Officer
Facebook
1 Hacker Way
Menlo Park, CA 94025

Sheryl Sandberg
Chief Operating Officer
Facebook
1 Hacker Way
Menlo Park, CA 94025

David Marcus
Chief Executive Officer
Calibra
Facebook
1 Hacker Way
Menlo Park, CA 94025

Dear Mr. Zuckerberg, Ms. Sandberg, and Mr. Marcus:

We write to request that Facebook and its partners immediately agree to a moratorium on any movement forward on Libra—its proposed cryptocurrency and Calibra—its proposed digital wallet. It appears that these products may lend themselves to an entirely new global financial system that is based out of Switzerland and intended to rival U.S. monetary policy and the dollar. This raises serious privacy, trading, national security, and monetary policy concerns for not only Facebook’s over 2 billion users, but also for investors, consumers, and the broader global economy.

On June 18, 2019, Facebook announced its plans to develop a new cryptocurrency, called Libra, and a digital wallet to store this cryptocurrency, known as Calibra. To assist it in this venture, Facebook has enlisted 27 other companies and organizations to form the Libra Association, which is based out of Switzerland. [1] These companies span the financial services and retail industry and include payment systems, like Mastercard, Paypal, and Visa, and technology giants, like Uber, Lyft, and Spotify. By the target launch date of early 2020, Facebook hopes to have recruited over 100 firms into the Libra Association.

While Facebook has published a “white paper” on these projects, the scant information provided about the intent, roles, potential use, and security of the Libra and Calibra exposes the massive scale of the risks and the lack of clear regulatory protections. If products and services like these are left improperly regulated and without sufficient oversight, they could pose systemic risks that endanger U.S. and global financial stability. These vulnerabilities could be exploited and obscured by bad actors, as other cryptocurrencies, exchanges, and wallets have been in the past. Indeed, regulators around the globe have already expressed similar concerns, illustrating the need for robust oversight.[2]

Investors and consumers transacting in Libra may be exposed to serious privacy and national security concerns, cyber security risks, and trading risks. Those using Facebook’s digital wallet – storing potentially trillions of dollars without depository insurance– also may become unique targets for hackers. For example, during the first three quarters of 2018, hackers stole nearly $1 billion from cryptocurrency exchanges.[3]The system could also provide an under-regulated platform for illicit activity and money laundering.

These risks are even more glaring in light of Facebook’s troubled past, where it did not always keep its users’ information safe. For example, Cambridge Analytica, a political consulting firm hired by the 2016 Trump campaign, had access to more than 50 million Facebook users’ private data which it used to influence voting behavior.[4] As a result, Facebook expects to pay fines up to $5 billion to the Federal Trade Commission (FTC), and remains under a consent order from FTC for deceiving consumers and failing to keep consumer data private. In the first quarter of 2019 alone, Facebook has also removed more than 2.2 billion fake accounts, including those displaying terrorist propaganda and hate speech.[5]It has also recently been sued by both civil rights groups[6] as well as the U.S. Department of Housing and Urban Development for violating fair housing laws on its advertising platform and through its ad delivery algorithms.[7]

Because Facebook is already in the hands of a over quarter of the world’s population, it is imperative that Facebook and its partners immediately cease implementation plans until regulators and Congress have an opportunity to examine these issues and take action. During this moratorium, we intend to hold public hearings on the risks and benefits of cryptocurrency-based activities and explore legislative solutions. Failure to cease implementation before we can do so, risks a new Swiss-based financial system that is too big to fail.

Sincerely,

Rep. Maxine Waters, Chairwoman

Rep. Carolyn Maloney, Chair – Subcommittee on Investor Protection, Entrepreneurship and Capital Markets

Rep. Wm. Lacy Clay, Chair – Subcommittee on Housing, Community Development and Insurance

Rep. Al Green, Chair – Subcommittee on Oversight and Investigations

Rep. Stephen F. Lynch, Chair – Task Force on Financial Technology

[1] The 27 other members of the Libra Association are Mastercard, PayPal, PayU (Naspers’ fintech arm), Stripe, Visa, Booking Holdings, eBay, Facebook/Calibra, Farfetch, Lyft, MercadoPago, Spotify AB, Uber Technologies, Inc., Iliad, Vodafone Group, Anchorage, Bison Trails, Coinbase, Inc., Xapo Holdings Limited, Andreessen Horowitz, Breakthrough Initiatives, Ribbit Capital, Thrive Capital, Union Square Ventures, Creative Destruction Lab, Kiva, Mercy Corps, and Women’s World Banking

[2] See, e.g. The Honorable Randal K. Quarles, Vice Chairman of Supervision for the Board of Governors of the Federal Reserve System and Chair of the Financial Stability Board, Financial Stability Board Chair’s letter to G-20 Leaders meeting in Osaka, June 25, 2019, https://www.fsb.org/2019/06/fsb-chairs-letter-to-g20-leaders-meeting-in-osaka/. (“A wider use of new types of crypto-assets for retail payment purposes would warrant close scrutiny by authorities to ensure that that they are subject to high standards of regulation.”); Bank of International Settlements Annual Economic Report, Big tech in finance: opportunities and risks, June 23, 2019, https://www.bis.org/publ/arpdf/ar2019e3.htm. (“Big techs have the potential to become dominant through the advantages afforded by the data-network activities loop, raising competition and data privacy issues. Public policy needs to build on a more comprehensive approach that draws on financial regulation, competition policy and data privacy regulation… As the operations of big techs straddle regulatory perimeters and geographical borders, coordination among authorities – national and international – is crucial.”)

[3] CipherTrace Cryptocurrency Intelligence, Cryptocurrency Anti-Money Laundering Report, 2018 Q3 https://ciphertrace.com/wp-content/uploads/2018/10/crypto_aml_report_2018q3.pdf.

[4] Kevin Granville, Facebook and Cambridge Analytica: What You Need to Know as Fallout Widens, (March 19, 2018).

[5] Facebook, Community Standards Enforcement Report (2019 Q1).

[6] Complaint, Nat’l Fair Housing Alliance et al. v. Facebook, Inc., No. 18-cv-02689 (S.D.N.Y Mar. 27, 2018), https://nationalfairhousing.org/wp-content/uploads/2018/03/NFHA-v.-Facebook.-Complaint-w-Exhibits-March-27-Final-pdf.pdf.

[7] Charge of Discrimination, U.S. Dep’t of Housing & Urban Development v. Facebook, Inc., FHEO No. 01-18-0323-8 (March 28, 2019), https://www.hud.gov/sites/dfiles/Main/documents/HUD_v_Facebook.pdf.

This article originally appeared in the Seattle Medium. 

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By Pamela J. Oakes, The Profitable Nonprofit

I run my own nonprofit consulting business. My brother runs his own real estate appraisal business. My father owned his own real estate company. One of my grandmothers ran her own hair salon. Another grandmother and grandfather owned a restaurant and my great-great grandfather was a country doctor and landlord. When it comes to entrepreneurship, you could say I was born into it.

While I have spent many (many) years in the corporate world, punching clocks, submitting timesheets, negotiating pay raises and begging for…I mean…requesting time off, there is something satisfying and extremely empowering knowing that I have the aptitude and competence to generate my own income. Sadly, entrepreneurial skills are quickly becoming a lost art.

In 2015, the United Nations adopted a set of Sustainable Development Goals (SDGs) as targets for global development to promote prosperity while protecting the planet. Among these goals is a mandate to “substantially reduce the proportion of youth (aged 15 – 24) not in employment, education or training.” Unlike most SDG targets set for the year 2030, this particular target is set to be achieved by 2020.

Including a youth employment goal makes perfect sense. To quote the United Nations, “ending poverty must go hand-in-hand with strategies that build economic growth and address a range of social needs including education…and job opportunities.” The only problem I see is that in this day of corporate restructuring, layoffs, retrenchment and downsizing, people of color are usually the last ones to get hired and the first ones shown the door. Without a backup plan, unemployed youth very quickly become unemployed adults!

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Entrepreneurship is a viable means to circumvent chronic unemployment in populations of color and needs to be REQUIRED learning in schools. Along with a mortarboard and a piece of paper, we should demand that our young people be “innovation ready” – meaning that they are equipped with the requisite abstract thought, problem solving, communication and collaboration skills that will enable them to invent their own careers.

Despite the billions of dollars pumped into our education system, U.S. high schools, colleges and universities are still primed to churn out employees NOT employers. Entrepreneurism can stimulate the economy by promoting economic opportunity. It can also serve as an agent of social justice and one way to dismantle the “preschool to prison pipe-line” disproportionately experienced by Black and Brown youth. Entrepreneur education benefits students from all socioeconomic backgrounds by helping them think outside-the-box, tap into their unrealized potential and nurture unconventional skills and abilities.

Taking a cue from Shirley Chisolm, the first Black woman to ever be elected to the U.S. Congress and the first woman to run for the Democratic Party’s presidential nomination, entrepreneur education teaches how to be unbought and UNBOSSED!

Pamela J. Oakes, Managing Director of The Profitable Nonprofit, is a funding consultant helping small and emerging nonprofits achieve funding sustainability. Pamela previously worked with the Bill & Melinda Gates Foundation.

This article originally appeared in The Seattle Medium.

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By The Seattle Medium

On Tues, Seattle Mayor Jenny Durkan signed into law a vision for a more livable, affordable community at Fort Lawton Army Reserve in the Magnolia neighborhood.

The legislation rezones nearly a third of the 34-acre property from single-family to multi-family adding more affordable housing in a high-opportunity neighborhood. The redevelopment will further fair housing choices by adding up to 238 units of mixed-income affordable housing including supportive housing for seniors and veterans, apartments for low-income households, and opportunities for homeownership. Much of the Fort Lawton site will be set aside for parks and open recreational uses.

“We must continue to act urgently to address our affordability and housing crisis. This plan builds on our commitment to create hundreds of more affordable homes while ensuring that our neighborhoods can be vibrant, livable spaces today and for the next generation,” said Durkan. “We stand on the shoulders of the efforts not just of the last 15 years, but of all those who have demanded that Seattle is more accessible, more welcoming, and more equitable. There should be no neighborhood in Seattle that people can’t live, and today we’re one step closer to making that vision real.”

“The plan to create 237 new affordable homes at Fort Lawton is the result of fifteen years of community engagement, planning, and advocacy. With housing costs soaring and displacement at crisis levels, the need for these homes has never been greater,” said Seattle City Councilmember Teresa Mosqueda. “The Fort Lawton plan will further fair housing, create greater equity, and advance opportunity by opening access to a high-cost area of the city that has previously been largely out of reach to low-income people and communities of color. Today, we celebrate as we move forward on an inclusive vision for the Fort Lawton site that will turn former military land into affordable homes for our military veterans, aging seniors, low-income families, and our neighbors who struggle with access to homeownership.”

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This article originally appeared in The Seattle Medium. 

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