Pressure mounts on Meta as Congress demands transparency

The United States House Financial Services Committee has intensified its scrutiny of Meta, the parent company of Facebook, over its cryptocurrency and blockchain-related plans. This comes as Meta currently has five active trademark applications related to cryptocurrencies and blockchain technologies.

The Committee, led by Maxine Waters, is seeking clarification from Meta’s founder and CEO, Mark Zuckerberg, and its operating chief, Javier Olivan, regarding the company’s intentions in the digital assets ecosystem.

Meta’s crypto intentions under scrutiny

The trademark applications in question were filed on March 18, 2022, and have raised concerns among lawmakers that Meta may be secretly working on digital assets despite previous denials. In a letter, Maxine Waters expressed her belief that these trademark filings “appear to represent a continued intention to expand the company’s involvement in the digital assets ecosystem.” 

This statement contradicts Meta’s claim to Democratic Financial Services Committee staff in October 2023 that it was not actively involved in digital assets work.

Meta’s checkered history with crypto

Meta, formerly known as Facebook, has a history of facing regulatory hurdles and pressure from lawmakers regarding its cryptocurrency endeavors. In mid-2019, the company abandoned plans to launch its cryptocurrency stablecoin, Diem (formerly Libra), due to significant opposition and regulatory concerns.

 In January 2022, Meta sold Diem for $200 million to Silvergate Bank, which later faced its financial difficulties.

Furthermore, Meta’s digital wallet project, Novi (formerly Calibra), which was slated for release by 2020, has also failed to materialize, leaving the company’s cryptocurrency ambitions in limbo.

Trademark filings and their implications

The trademark applications that have attracted the attention of the House Financial Services Committee cover a range of services related to cryptocurrencies and blockchain technology. 

These services include trading, exchange, payments, transfers, wallets, and associated hardware and software infrastructure.

Each of these trademark applications has received a Notice of Allowance (NOA), indicating that they meet the registration requirements. 

Meta is now obligated to either declare its intention to use the trademark within six months or request a six-month extension to file the statement. The first NOA was sent to Meta on August 15, 2023, and the latest on January 16, 2024, giving the company until July 16, 2024, to respond.

Committee’s questions for Meta

In her letter addressed to Mark Zuckerberg and Javier Olivan, Maxine Waters, the ranking member of the House Financial Services Committee, presented a series of pivotal inquiries aimed at shedding light on Meta’s cryptocurrency and blockchain intentions.

Waters pressed Meta regarding its response to the Notices of Allowance (NOAs) associated with the trademark applications. She sought clarification on whether Meta plans to utilize these trademarks for projects related to Web3, cryptocurrencies, or digital wallets. 

This query underscores the Committee’s interest in understanding the company’s immediate intentions in the digital assets space.

The Committee also expressed a keen interest in Meta’s potential foray into the realm of cryptocurrency payments. Waters inquired directly if Meta has concrete plans to launch a cryptocurrency payments platform, signaling the regulatory body’s vigilance over the evolving landscape of digital currencies.

The issue of stablecoins and potential partnerships with stablecoin projects was another key area of concern highlighted in the letter. Waters probed the extent to which Meta has delved into researching stablecoins, a critical component in the cryptocurrency ecosystem. 

Additionally, she sought insights into whether Meta is contemplating collaborative ventures with stablecoin initiatives, further underscoring the regulatory scrutiny surrounding potential alliances in the crypto sector.

The Committee’s curiosity extended to Meta’s exploration of distributed ledger technology (DLT). Waters inquired whether Meta is actively considering the adoption of DLT in its operations, recognizing the significance of this technology in enhancing transparency and security within the blockchain space.

The letter finally delved into the integration of cryptocurrency-related functionalities within Meta’s metaverse, a central focus for the company. Waters sought information on how Meta plans to leverage its technological capabilities to enable cryptocurrency-related features within its metaverse, reflecting the growing intersection of virtual worlds and digital currencies.

These pointed questions from the House Financial Services Committee underscore the regulatory body’s determination to gain insight into Meta’s activities in the cryptocurrency and blockchain domains. As the cryptocurrency industry continues to evolve, 

Meta’s responses to these inquiries may play a pivotal role in shaping the company’s future endeavors and its compliance with regulatory standards.

Meta’s response awaited

As of now, Meta has not yet responded to the House Financial Services Committee’s request for information. The company’s stance on these trademark applications and its broader intentions in the cryptocurrency and blockchain space remain undisclosed.