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Congresswoman Maxine Waters Criticizes Meta and Its Prolonged Crypto Ventures

2 mins
Updated by Ryan Boltman
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In Brief

  • Maxine Waters seeks clarity from Meta on its recent filings for crypto-related projects and its intentions to develop web3 wallet projects.
  • Despite previous confirmations of no ongoing crypto projects, Meta's recent patent applications suggest planned activity in digital assets.
  • Amidst Meta's crypto plans, Binance's court case with the SEC over the securities status of crypto reiterated flaws in the SEC's reasoning.
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Congressman Maxine Waters wrote a letter to Meta Platforms (formerly Facebook), asking for clarity on recent filings describing crypto-related projects. Meta has submitted applications to the US Patent and Trademark Office (USPTO) to develop crypto infrastructure and offer trading services amid a potential crypto shakeup at the US Securities and Exchange Commission (SEC).

The congresswoman demands answers from Meta on whether the company intends to pursue Web3, digital assets, or digital wallet projects. She also wants to understand Meta’s ambitions to create mining, storage, transmission, and settlement technologies associated with crypto.

Meta and Its Failed Crypto Project in Focus

Meta filed applications with the USPTO on Monday to integrate crypto with social media services and develop blockchain-related technologies. Concerning the latter, the company is looking to secure service mark applications for crypto payment verification services and blockchain as a service. It also wants to offer “e-wallet services.”

Read more: How To Accept Crypto Payments: A Brief Guide

meta crypto payments
An Example of Social Media Crypto Payment | Source: Contentworks

Waters seeks clarity on Meta’s crypto plans after employees confirmed last October that the company had no ongoing crypto-related projects. She referred to Meta’s failed Diem project as the reason for her concern. 

“Members of the Committee have previously expressed their concerns regarding Facebook’s potential creation of a cryptocurrency…However, the trademark applications described above seem to indicate that Meta has not ceased its activity in digital assets since the shutdown of [stablecoin project] Diem,” Waters said.

The President’s Working Group for Financial Markets and two other government offices warned that the Diem project would place too much power in the hands of a commercial organization.

“It became clear from our dialogue with federal regulators that the project could not move ahead,” CEO of Diem, Stuart Levey, said.

SEC Gets Rebuked for Crypto Approach

In the meantime, the US Government Accountability Office (GAO) has found minimal concerns with how the US Securities and Exchange Commission (SEC) handles crypto assets. It appeared to disagree with SEC Chairman Gary Gensler’s opinion that most cryptocurrencies are securities. 

Despite having a claimed staff headcount of 116, the SEC may lack crypto skills because it can’t compete with private sector salaries. The GAO recommended that the SEC’s fintech outreach group develop measurable goals aligned with its 2022-2026 roadmap.

Binance went to court on Monday in a bid to dismiss the SEC’s lawsuit against it. Much of the SEC’s argument is built on whether Binance offers assets that fall under the SEC’s purview. A lawyer for Binance said the SEC had yet to provide a clear path to registration despite asking companies to register.

sec crypto
SEC Uses Howey Test on Crypto Assets | Source: Kyrian Alex

Read more: Top 12 Crypto Companies to Watch in 2024

The Binance judge has chosen to take the issue under advisement. The judge in the SEC’s case against cryptocurrency exchange Coinbase said the SEC’s argument seemed to bring all digital assets under the agency’s purview.

“It seems like you are trying to say that all digital assets, at the end of the day, have the earmark of securities. If you are not, where is the boundary of what you are saying?” the Judge stated.

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David Thomas
David Thomas graduated from the University of Kwa-Zulu Natal in Durban, South Africa, with an Honors degree in electronic engineering. He worked as an engineer for eight years, developing software for industrial processes at South African automation specialist Autotronix (Pty) Ltd., mining control systems for AngloGold Ashanti, and consumer products at Inhep Digital Security, a domestic security company wholly owned by Swedish conglomerate Assa Abloy. He has experience writing software in C,...