Warren, Sanders and other senators demand Meta Do More to fight crypto fraud

As Facebook parent company Meta continues to build out its new metaverse venture, several US senators have called on CEO Mark Zuckerberg to prove that the social media giant is serious about fighting crypto fraud on its platforms.

On Friday, the group — led by Democrat Bob Menendez of New Jersey — issued a letter to Zuckerberg asking the firm to provide information about its efforts to fend off cryptocurrency-related scams on platforms such as Facebook, Instagram and WhatsApp.

In the letter, Menendez and his colleagues claim that “Meta provides a breeding ground for cryptocurrency fraud that causes significant harm to consumers.”

Senate Banking Committee Chairman Sherrod Brown signed the letter along with fellow senators Elizabeth Warren, Dianne Feinstein, Bernie Sanders and Cory Booker.

“While crypto fraud is widespread in social media, several of Meta’s sites are particularly popular hunting grounds for fraudsters,” the senators wrote. They noted that of the consumers who reported being scammed out of their cryptocurrency, 32% said the fraudulent activity took place on Instagram, along with 26% on Facebook and 9% on WhatsApp.

A statement posted on Senator Menendez’s website cites his long history of criticism of Facebook for allowing controversial content on its platforms, including misinformation about COVID-19, elections and the Russian invasion of Ukraine.

The senators also wrote that they are concerned about how little Meta is doing to prevent misinformation from being spread in Spanish. They asked if Meta provides warnings or educational materials regarding crypto scams in languages ​​other than English.

Senators want Meta to detail the company’s current policies, including practices for proactively finding and removing crypto scammers and how it verifies that crypto ads are not scams. There are also questions about the company’s guidelines for proactive training and protection of users, working with law enforcement and removing fraudsters from the platforms.

In the letter, the senators cite Facebook’s January 2018 ban on cryptocurrency-related ads on its platform. At the time, Facebook said many companies advertising binary options, initial coin offerings (ICOs) and cryptocurrencies were not operating “in good faith.” ,” claiming that the ban would prevent fraudsters from profiting from a presence on the platform.

“This ban clearly demonstrates that you understand the risks that this type of content poses to users,” the senators wrote, adding that there is a need for a higher level of scrutiny around cryptocurrency.

Meta recently began integrating NFTs into its platforms, allowing Instagram and Facebook users to display owned artwork and collectibles from the Ethereum, Polygon, and Flow networks. NFTs are cryptographic tokens that can prove ownership of a unique item, including things like profile pictures and digital artwork.

It remains unclear how much blockchain networks and cryptocurrency will play a role in Meta’s large-scale ambitions for the metaverse — that is, a future internet experienced with 3D avatars — although Zuckerberg has said he’s open to using interoperable assets.

Some in the crypto space fear a centralized giant like Meta taking root, with co-founder Yat Siu off Web3 investment firm and game publisher Animoca Brands calls the firm a “threat” to an open metaverse.