Maxine Waters Vigorously Probes Meta’s Controversial Cryptocurrency Involvement

Congresswoman Maxine Waters has taken action just a week after the Patent and Trademark Office paved the way for one of Meta’s digital currency software proposals. In a letter addressed to Meta’s CEO, Mark Zuckerberg and COO Javier Olivan, Waters questions the company’s true intentions in the cryptocurrency industry. 

The letter was sent on Jan. 22 and pointed out that Meta’s application submissions, starting on March 18, 2022, and continuing until January 22, indicate a sustained commitment to expanding the company’s involvement in the digital assets ecosystem.

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Unanswered Questions Surrounding Meta’s Crypto Plans

Despite Meta’s activities, like submitting five trademark applications related to cryptocurrency and blockchain, the company has not yet responded to queries regarding its cryptocurrency plans. This lack of transparency has caught the attention of Maxine Waters, who has implied that these trademark filings might contradict previous communications between the Democratic Financial Services Committee and Meta staff. 

In her letter, Waters notes that representatives of Meta had previously stated that the company was not actively pursuing developments related to digital assets or blockchain technology. Waters presses Meta for transparency on its cryptocurrency initiatives to seek clarification. 

Maxine Waters vs. Meta: A History of Concerns

This latest clash between Maxine Waters and Meta’s executives is not the first of its kind. In June 2019, when Meta was still known as Facebook, the company announced ambitious plans to create a stablecoin named Libra and a wallet service named Calibra. 

At that time, Waters, serving as the ranking member of the House Committee on Financial Services, expressed her reservations. She criticised what she perceived as the unchecked expansion of Facebook into the cryptocurrency market, highlighting the lack of a clear regulatory framework to protect investors, consumers, and the economy.

Despite Waters’ concerns, Meta persisted with the project, eventually rebranding it as Diem and establishing the Diem Association in Switzerland. Maxine Waters conducted congressional hearings and personally flew to Switzerland to meet with government officials, underscoring her commitment to monitoring the cryptocurrency’s development.

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Regulatory Worries and the Demise of Diem

Regulatory concerns regarding the concentration of power emerged in a November 2021 report from the President’s Working Group on Financial Markets, the Federal Deposit Insurance Corporation, and the Office of the Comptroller of the Currency. The report raised alarms about a single company producing both a stablecoin and its related wallet, citing potential anti-competitive effects.

In response to these regulatory challenges, the Diem Association struggled to find a viable path with regulators in the U.S. and abroad for over two years. However, the organisation folded almost three months after the report’s release. All assets and intellectual property were subsequently acquired by Silvergate, a California-based bank specialising in crypto-related services.

Mixed Messages and the End of Diem

In the aftermath of Diem’s closure, CEO Stuart Levey argued that the company had received mixed messages from regulators despite positive feedback on the network’s design. In a statement released in January 2022, Diem insisted that regulators viewed the stablecoin project as innovative and well-designed, with changes implemented in accordance with regulatory concerns. 

Levey pointed out that, despite receiving positive substantive feedback, it became clear from the ongoing dialogue with federal regulators that the project could not move ahead.

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Meta’s Recent Trademark Filings Reignite Debate

Congresswoman Maxine Waters has revisited past concerns as Meta’s recent trademark filings reignite the debate on the company’s involvement in the cryptocurrency space. Waters has already played a big role in scrutinising Meta’s actions and continues to advocate for transparency and clear communication regarding the company’s cryptocurrency initiatives.

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