The makers of Kik’s Kin cryptocurrency, which itself is no stranger to regulatory issues with the US government, do not feel one shred of sympathy for Facebook as Congress rakes Libra over the coals on Capitol Hill.
The chat app, with its more than 300 million registered users, made waves during the 2017 gold rush when it held a nearly $100 million initial coin offering (ICO), only to have social media leviathan Facebook and its 2 billion users steal its thunder two years later.
Look Who’s Talking
At launch, the token provided little or no utility – despite its lofty ambitions – and regulators have sued the company for allegedly dealing in unregistered securities.
Kik has decided to go to the mat with the SEC, and has received wide support from the crypto community.
Now that Facebook is tepidly entering the crypto space, Kin Ecosystem General Manager Alex Frenkel commented in remarks shared with CCN about the government’s inquisition of Facebook crypto chief David Marcus.
“I’d like to see regulators ask Facebook why we should trust it when it says that it won’t see any financial data from a wallet service operated by its new subsidiary Calibra or that it won’t have any special responsibility over the Libra Network. When Facebook purchased WhatsApp and Instagram, it also said it wouldn’t be able to unify products under one platform but that’s what is happening today. Everything is being brought together, and Facebook isn’t acting the way it promised. Why will it now?”
Most of Frenkel’s concerns were, in fact, addressed at the US Senate Committee on Banking, Housing, and Urban Affairs hearing this morning.
Who Trusts Facebook – or Libra?
Watch: Facebook’s Crypto Chief Suffers Brutal Senate Backlash https://t.co/JzpIXEcs2a
— CCN Markets (@CCNMarkets) July 16, 2019
Senator Sherrod Brown from Ohio was particularly inquisitive as to Facebook’s track record with data security and handling large responsibilities.
Frenkel continued his comments:
“More broadly, I believe having a public conversation around crypto-related issues is very important with the more questions asked the better. It won’t just be beneficial for Libra, but for our entire industry. And these conversations and questions shouldn’t just be limited to regulators; the more other projects and the crypto community, companies from other industries, and the public at large are involved in these discussions, the better it will be for all.”
These comments echo Kik and the Kin Foundation’s recent struggle to establish a new means test for distributed ledger technologies, so that virtually everything doesn’t qualify as an unregistered security. One report alleged that the project’s SEC lawsuit was “sinking” Kik’s business.
None of the legislators who interviewed David Marcus this morning were overly enthused with Facebook’s plans. The talk was not all negative, however, with people like Senator Pat Toomey commenting on the “enormous potential” of blockchain technology.