Following the news that several more companies had left Facebook’s Libra project, U.S. Secretary of the Treasury Steven Mnuchin, said on Monday (Oct. 14) that he thinks the companies left because the proposed cryptocurrency was not ready to meet government regulations.
CNBC is reporting that Mnuchin met with Libra representatives and told them “that if they don’t meet ... our money-laundering standards and the standards that we have at [Financial Crimes Enforcement Network] that we would take enforcement actions against them. And I think they realized that they’re not ready, they’re not up to par. And I assume some of the partners got concerned and dropped out until they meet those standards.”
The Libra Association is a coalition of companies meant to help bring the new cryptocurrency to fruition, and five companies left it on Friday: Visa, Mastercard, Stripe, eBay and Mercado Pago. PayPal also recently left. The coalition originally included 28 companies. The Libra Association had planned to meet in Geneva on Monday.
Libra, and Facebook in general, are both under scrutiny by the government, and Facebook is at the center of a few different investigations by various departments. The House Financial Services Committee has asked Facebook leader Mark Zuckerberg to congress on Oct. 23 to testify, and Libra project leader David Marcus, who used to be the president of PayPal, testified in July.
Several officials reportedly told Facebook to slow down with Libra, which the social media giant has plans to release in 2020, but the company said it wanted to keep moving forward. The company said it did, however, have plans to assuage lawmakers’ concerns.
A Visa spokesperson told CNBC that it wasn’t going to stay in the Libra Association any longer.
“We will continue to evaluate and our ultimate decision will be determined by a number of factors, including the Association’s ability to fully satisfy all requisite regulatory expectations,” the spokesperson said in a statement.