Facebook CEO Mark Zuckerberg Mark Elliot ZuckerbergHillicon Valley: Productivity, fatigue, cybersecurity emerge as top concerns amid pandemic | Facebook critics launch alternative oversight board | Google to temporarily bar election ads after polls close Conservative groups seek to block Facebook election grants in four swing states: report Facebook critics launch alternative oversight board MORE on Wednesday fielded sharp criticism and tough questions about nearly all aspects of his company's business practices at a hearing about Facebook’s new cryptocurrency project Libra.

The aggressive questioning underlined how difficult it will be for the Libra project to move past the baggage of Facebook’s various controversies, which have angered lawmakers on both sides of the aisle.

During the House Financial Services Committee hearing, Zuckerberg found some allies in Republican lawmakers who praised the tech executive’s “entrepreneurial spirit” and the “innovation” of the Libra coin.

ADVERTISEMENT

But over the course of the day, Republicans and Democrats alike pummeled Zuckerberg over Facebook-related issues, including the continued presence of hate groups on the platform, the company’s struggles to stave off foreign election interference, its policies on disinformation, how the company treats its content moderators and why it hopes to move into the financial services space when it is already facing intensifying scrutiny of its market dominance.

"As I have examined Facebook's various problems, I have come to the conclusion that it would be beneficial for all if Facebook concentrates on addressing its many existing deficiencies and failures before proceeding any further on the Libra project," House Financial Services Chairwoman Maxine Waters Maxine Moore WatersPowell, Mnuchin stress limits of current emergency lending programs Pelosi: House will stay in session until agreement is reached on coronavirus relief Omar invokes father's death from coronavirus in reaction to Woodward book MORE (D-Calif.) said during her opening remarks.

“You have opened up a serious discussion about whether Facebook should be broken up," Waters said, adding her voice to the chorus of policymakers around the world who have questioned whether Facebook is too big and powerful.

Zuckerberg remained serious and reserved throughout the six-hour hearing and even seemed aggravated during particularly rough lines of questioning as the day wore on. Lawmakers on the committee, led by Waters, have called for Zuckerberg to pause the Libra project until the companies involved can address the outstanding regulatory concerns around the coin.

“We've faced a lot of issues over the past few years,” Zuckerberg conceded. “I'm sure there are a lot of people who wish it was anyone but Facebook who is helping to put this forward.”

“But there’s a reason we care about this,” he continued. “Facebook is about putting power in peoples' hands.”

Zuckerberg offered a staunch defense of the controversial cryptocurrency project, which has faced skepticism and pushback from regulators around the world since Facebook announced its plans over the summer. He said the cryptocurrency project could help bring financial services into the hands of billions of people worldwide.

While he reminded lawmakers that he cannot speak for the broader Libra Association, the 21-member entity tasked with overseeing the cryptocurrency’s launch, lawmakers insisted the cryptocurrency is inextricably tied to Zuckerberg and Facebook.

“Libra is Facebook, and Facebook is you,” said Rep. Ayanna Pressley Ayanna PressleyEnding the Hyde Amendment is no longer on the backburner Fauci, Black Lives Matter founders included on Time's 100 Most Influential People list Trump attacks Omar for criticizing US: 'How did you do where you came from?' MORE (D-Mass.). “You’ve proven we cannot trust you with our emails, with our phone numbers, so why should we trust you with our hard-earned money?”

Libra’s complex structure and massive scale will likely be subject to a vast array of banking, securities, money laundering and illicit finance laws enforced by close to a dozen agencies and departments.

Even the most industry-friendly lawmakers and regulators have expressed alarm about the potential financial impact of a project already primed with 2 billion potential customers.

“I think we should advance. I think we should seek innovation. I'm not opposed to some of the things that you're trying to do,” said Rep. Barry Loudermilk (R-Ga.).

“I'm gravely, gravely concerned about the implications they may have, the operation of it, but I think we need to give it due consideration,” Loudermilk continued, adding Libra doesn’t “fit in a box.”

As a payments system, Libra would be forced to monitor transactions to make sure they don’t run afoul of illicit finance laws enforced by the Treasury Department.

While Libra does not intend to be a bank, it could still draw scrutiny from several federal bank watchdogs. Because Libra uses a cryptocurrency, that also brings the Securities and Exchange Commission and the Commodity Futures Trading Commission into the fold.

And Libra’s broader impact on the global financial system will involve the Federal Reserve, whose chairman, Jerome Powell, urged Libra to hit the breaks or risk serious regulatory backlash.

“You're creating a whole new currency that could potentially be anonymous and could hide all types of criminal activity,” said Rep. Carolyn Maloney Carolyn Bosher MaloneyPelosi, Democrats unveil bills to rein in alleged White House abuses of power Government watchdog recommends creation of White House cyber director position Top Democrats call for DOJ watchdog to probe Barr over possible 2020 election influence MORE (D-N.Y.), who called Libra “a huge concern to all Americans and national security."

The Libra project is still in its very early stages. Facebook released a white paper laying out its vision over the summer, and the 21 initial members of the Libra Association signed on to its charter just last week. Throughout the day, Zuckerberg emphasized there are still many unresolved questions around what the coin could look like by the time it is launched.

“I actually don’t know if Libra is going to work,” Zuckerberg said.

Right now, the executive said, the founding companies behind the coin are “making sure we can architect a system that works and gets the appropriate regulatory approvals.”

He repeatedly committed that Facebook, currently the Libra coin’s only financial backer, would not support launching the project until U.S. regulators have gotten behind it. He added that Facebook would leave the project entirely if the association tries to launch the cryptocurrency without the go-ahead from concerned regulators.

Zuckerberg’s appearance before the House panel came more than a year since he testified about the Cambridge Analytica scandal in a series of widely publicized congressional hearings. His return before Congress comes amid a broader Washington backlash as lawmakers and 2020 Democrats have ratcheted up scrutiny of Big Tech over issues including user privacy, market dominance and election interference.

The past year has seen a swirl of new controversies, scandals and investigations erupt around Facebook. Just after the company settled for a record-shattering $5 billion fine with the Federal Trade Commission over charges of privacy violations, the company revealed it is facing a separate antitrust investigation from that agency. Meanwhile, the Department of Justice and a team of bipartisan House lawmakers are also probing whether Facebook uses its market dominance in digital advertising and social media to quash competitors and take advantage of users.

“I don’t think we can trust you,” said Rep. Jesús García (D-Ill.), who has introduced a bill that would quash the Libra project. “Facebook has acquired too much power, it has become too big, and we should seriously consider breaking it up.”

At the end of the hearing, Waters and the top Republican on the committee said there are still a litany of outstanding concerns around the cryptocurrency effort.

“We still don’t have a deeper understanding of how Libra will work, how it will further financial inclusion ... or how it may expand access to financial services for Americans that need it most,” ranking member Patrick McHenry Patrick Timothy McHenryCheney battle raises questions about House GOP's future Hillicon Valley: Democrats request counterintelligence briefing | New pressure for election funding | Republicans urge retaliation against Chinese hackers House Republicans urge Trump to take action against Chinese hackers targeting coronavirus research MORE (R-N.C.) said.

After the hearing, Waters told reporters that she was not satisfied yet, though she was pleased that Zuckerberg came to testify.