Bitcoin and other cryptocurrencies plummeted as Facebook CEO Mark Zuckerberg tried to defend his beleaguered digital currency Libra – a project rapidly losing institutional support as it hits one regulatory hurdle after another.

If Facebook isn’t allowed to go forward with the rollout of its digital currency, China will surpass the US in technological innovation, Zuckerberg threatened the House Financial Services Committee on Wednesday. The billionaire’s bid to save Libra – and its public image – after several of the big-name financial institutions backing the online payments system dropped out saw the bottom fall out of the already-sluggish crypto market.

“We can’t sit here and assume that because America is today the leader, that it will always be the leader if we don’t innovate,” the Facebook CEO pleaded with Congress. “If we don’t do things like this… eventually, we lose our leadership.” Translation: approve Libra, or the dollar gets it.

Bitcoin plunged to a four-month low of $7,440.51 before Zuckerberg even opened his mouth and continued to drop as he struggled to explain how Libra would drag the US financial system kicking and screaming into the 21st century. Bitcoin wasn’t the only cryptocurrency affected by the billionaire’s limp defense of what one congressman called “Zuck bucks” – Ethereum, Dash, Monero, Litecoin, and other digital currencies were all down, most by more than 10 percent, as Congress piled on the social media magnate.

“Cryptocurrency either doesn’t work… or it does achieve its objectives, perhaps, and displaces the US dollar or interferes with the US dollar being the sole reserve currency in the world,” Rep. Brad Sherman (D-California) declared, singing the dollar’s praises as he demanded of Zuckerberg how he would protect the American financial system and its users from drug dealers, terrorists, tax evaders… and his own business partners.

You’re going to be making powerful burglary tools and letting your business partners commit the burglary!

The Facebook CEO had promised the company’s newly-minted financial subsidiary Calibra would not begin doing business until it was cleared by US regulators, but could not guarantee Facebook’s business partners would not create anonymous wallets or otherwise violate financial regulations. Even the process of nominating board members to the Libra Association, based in Switzerland, would eventually not involve Facebook, Zuckerberg admitted.

Facebook’s rock-bottom trust rating was a popular topic in the hearing. “Have you learned that you should not lie?” Rep. Nydia Velasquez (D-New York) asked after reminding Zuckerberg he had claimed WhatsApp was “impossible” to integrate with Facebook, then integrated it less than 18 months later – momentarily silencing the CEO before he mustered a perfunctory denial.

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Zuckerberg had help pushing the idea that Libra was a hedge against Chinese supremacy – Rep. Andy Barr (R-Kentucky) called “the risks of not innovating” and falling behind other countries in financial technology a “national security issue,” while ranking Republican Patrick McHenry (North Carolina) declared that “American innovation [was] on trial” in the form of Facebook.

Let us not forget that the wave of innovation is spreading across the world, with or without us.

But committee chair Maxine Waters (D-California) wasn’t having it, reminding Zuckerberg that Facebook had actually banned cryptocurrency ads from its platform just a year before unveiling Libra “because they are frequently associated with misleading or deceptive promotional practices.”

“How did cryptocurrency go from being misleading and deceptive last year and then becomes a means for financial inclusion this year?” Waters asked.

It seems to me that you shifted your stance because you realized you could use your size and your users’ data to dominate the cryptocurrency market.

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Libra is “too big for any single company to undertake on its own,” Zuckerberg said after Rep. Ann Wagner (R-Missouri) asked why so many of Libra’s big-name partners – Visa, MasterCard, Paypal, eBay – had jumped ship, acknowledging that the digital currency was “a risky project” and that he didn’t know if it would work. But Zuckerberg said he views the US financial system as “outdated,” and China, he constantly reminded Congress, is working on its own public-private digital currency partnership with payment processor Alipay, which boasts 900 million users.

Is Libra too big to fail? Crypto investors seem to think so.

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