Facebook’s Libra digital currency release is slated for 2020, but its fake tokens dubbed as “early access” offerings are selling on social media. There have been reports of scam videos on YouTube as well as sellers on Instagram and Facebook.
Websites, sleekly designed to mirror Libra’s marketing materials are already operational. Buylibracoins.com, for instance, allows users to create their accounts and purchase Libra with BTC or other cryptos. Libra’s official website, however, is Libra.org.
Scammers Could Thwart Libra’s Launch
The fake Libra purchase pages could not have shown up at a worse time for the embattled social media giant. Facebook is currently under immense scrutiny from the US government over Libra. Its past data privacy failures have consequently been brought to the forefront.
Facebook has been engaged in a fight for Libra’s life with the US legislature. It has become apparent that Facebook is not going to have an easy time with Libra as far as world governments are concerned. Most regulators have questioned the move by multinationals planning to release their digital currencies.
The US House Financial Services Committee Democrats have proposed a bill that would ban large technology companies from offering native digital assets. Dubbed the ‘Keep Big Tech Out of Finance Act’, the law if passed, would lock out any social media, e-commerce or exchange company with at least $25 billion in annual revenue.
David Marcus, the social media platform’s cryptocurrency chief, tried to argue Libra’s case out before a rather hostile committee. Rep. Carolyn Maloney told Marcus that Libra should not be launched. The legislators view Libra as a threat to the established financial system. The American president Donald Trump, for instance, has said that Facebook might need a national bank charter to launch Libra.
The incensed politicians have consequently taken jabs at Facebook, targeting its lowest hanging fruit; an inability to manage data on its platform. Cornell University’s economics professor Eswar Prasad says:
“There is a deep irony here in Facebook being used as the platform that could undermine trust in the currency Facebook is trying to build trust in. Facebook has an enormous worldwide network and enormous financial muscle. . . But the only way Libra will work well as a medium of exchange is if everyone can trust it. And that’s the big question right now: whether there is going to be enough trust in Facebook”.
Facebook Cannot Keep Up With Fraudsters
The social media platform has, in turn, said that it does remove pages and ads that violate its policies. It, however, is in the process of improving the speed of the detection of fake news and scams. Senator Mark R. Warner has said that these fake Libra purchase pages are a clear indication that Facebook might have been bitten off more than it can chew with Libra. The Democrat on the Senate Banking Committee has asked Facebook instead not to launch till all regulatory issues have been settled.
Facebook policies do not allow unapproved advertisement of cryptocurrencies on its platform. The fake crypto ads have already cost it $3.7 million in settlements. Martin Lewis, the founder of MoneySavingExpert, sued them after his face appeared in Facebook crypto ads.
The scammers are trying to profit from Libra’s widespread attention, but Facebook seems unprepared for this expected occurrence. Some other pages are reserved key Libra brand names for future use.