According to a report from the Financial Times, three of the firms (which were not named) expressed concerns over being seen to be linked to the project after watchdogs around the world raised concerns over its potential threat to financial stability.
Several backers of Facebook’s Libra cryptocurrency project are said to be considering backing out due to growing pressure from regulators.
The EU was recently reported to have even moved to investigate the Libra Association over potential antitrust issues. Over in the U.S., lawmakers have called for Libra to be halted until regulatory issues have been addressed.
As a result, two of the firms are considering pulling out of the Libra project, the FT said.
Since its debut in mid-June, Libra is said to have been joined by 28 member firms who have paid up to $10 million to be part of the project. These include major firms such as Visa, Mastercard, Paypal and Uber. Visa’s CEO revealed last month that the firms had signed “nonbinding letter of intent to join Libra”, and were not yet fully committed to the enterprise.
“It’s going to be difficult for partners who want to be seen as in regulatory compliance” to be publicly supporting Libra, one of the companies told the FT. A Libra backer also said that Facebook should have addressed the regulatory issues before announcing the project to lessen the “pushback.”
The frustrations appear to be going both ways, with the sources saying that Facebook itself is unhappy that the Libra Association members aren’t voicing support for the project.
“Facebook is tired of being the only people putting their neck out”, said one of the members.
Facebook and the Libra Association would not comment when contacted by the FT.
Facebook’s Libra Project Launches Bug Bounty With $10,000 Max Reward
Facebook is gunning to get more external contributions to the cryptocurrency project Libra, starting with a bug bounty program that pays security researchers up to $10,000 in rewards.
The Libra Association, a nonprofit backed by a coalition of companies like Visa and PayPal that are interested in supporting Facebook’s new blockchain ecosystem, previously announced plans for the bounty program that went live Tuesday.
“There’s a variable amount of rewards based on bugs”, Diogo Monica, Anchorage cofounder and Libra Association member, told CoinDesk. “This is great for the Libra community, this is consistent with the values of the infosec community in general.”
This bug bounty program attracted unanimous praise from association members, an important political step even beyond technical benefits. The Financial Times reported earlier this month that two of these firms might pull out entirely due to regulatory concerns. For example, U.S. Rep. Maxine Waters (D-Calif.), who heads the House Financial Services Committee, released a statement on Sunday repeating her concerns about “allowing a large tech company to create a privately controlled, alternative global currency.”
Within that context, fostering volunteer contributions to open-source aspects of the project may be more important than ever. As such, the Libra Association is expanding the beta program with 50 external researchers to welcome any member of the public to report vulnerabilities in the code, through a partnership with the HackerOne bug bounty platform.
“We hope that developers will bring a diversity of perspectives and expertise to this initiative while holding the Libra Blockchain to the highest security standard”, Aanchal Gupta, security director at Facebook subsidiary Calibra, said in a statement.
Such bounty programs are the norm in cybersecurity circles, offering significant value to the project with regards to both insights and public trust. Plus, Libra Association communications lead Dante Disparte added that the Libra testnet is still under development. As such, vulnerabilities found now could significantly impact the final version.
“Some of the initiatives that Libra Association is doing is very forward-thinking”, Jesse Spiro, head of policy at the blockchain analytics firm Chainalysis, told CoinDesk. “Having problems that are already beginning to be identified, by being very proactive and strategic, is a good thing.”
Overall, there are already developers experimenting with the Libra testnet, including dozens of teams that applied to the Libracamp program based in Israel, which isn’t officially affiliated with Facebook.
With regards to getting regulatory sign-off, Disparte said in a statement:
“We will not launch the Libra Blockchain until regulatory concerns have been taken into account and required regulatory approvals have been received.”