With its launch far from certain, scams surrounding Facebook’s Libra cryptocurrency project are emerging with increasing frequency.
Reports are emerging that a secondary market in Libra investment tokens has already emerged without any intervention from Facebook or its consortium.
According to Finance Magnates, Calibra’s chief operating officer, Tomer Barel, said that the company has no connection to any trading that is taking place in Libra investment tokens.
He added that the tokens don’t even exist yet so whatever is being sold at the moment is nothing but “thin air.”
“At the moment, yes they are selling thin air. Maybe they are selling a promise that in the future they will have the tokens but, at the moment, there are no investment tokens.”
Not that Libra – the other Libra
Libra investment tokens (LIT) – not to be confused with the Libra cryptocurrency – are security tokens that are issued only to Libra Association founding members, of which there are currently 28.
The Libra Association is largely made up of U.S. tech and finance giants like eBay, Visa, Stripe, Mastercard, and (of course) Facebook, each of whom have invested a minimum of $10 million to become a node operator and have a say in Libra’s governance.
Recipients of the Libra Investment Tokens earn dividends and receive voting rights proportional to the number of LIT tokens they hold.
This is partly why there has been so much backlash to the project which is effectively putting billions of potential transactions and personal financial data in the hands of a few tech corporations.
Barel added that LIT tokens might not even be tradeable when launched. It is highly likely that Facebook and its partners will keep a tight grip of control over them, and their movements.
“This is something that the members of the Libra Association will have to discuss,” he said.
“Our hope, as we have already shared, is that we would hope that they do allow the tokens to be traded.”
The Libra cryptocurrency, on the other hand, is designed to be a stablecoin, backed by the USD so what anyone has to gain by selling fake tokens which will be worth the same when sold remains a mystery.
Speaking at the Ethereal Summit in Tel Aviv Barel continued to add that he knew there would be some regulatory resistance and that it was not viewed as something negative.
“But we view this as a positive thing. Our goal isn’t just to expand access to financial services across the globe, we also want to support the stability of the world economic system.”
Translation: Facebook wants to become the world’s largest bank, holding all the purse strings.
“Facebook” and “scams” are often uttered in the same breath so it is no surprise that unscrupulous characters are using the platform to try and profit off its nonexistent tokens.
Last year the social media giant banned all cryptocurrency advertising, yet continued to allow users to post fake pages and fraudulent websites to lure in the unsuspecting.
Facebook rescinded its cryptocurrency ad ban in May, ahead of the release of the Libra whitepaper.
Following the announcement of Project Libra, it was reported that dozens of fake accounts, pages and groups were created on Facebook fraudulently claiming to be official hubs for the Libra token.
The platform is reactionary to these things in that it removes them after discovery rather than making any effort to prevent the dissemination of Libra scams on its network in the first place.
Libra is not getting off to the auspicious start it had no doubt envisioned.
With global regulators already waving the metaphorical ban hammer, Facebook’s propensity as a scam magnet, along with its dire track record with data security, could see the project quashed before it even gets out of the gate.