Proposali think the has huge potential, and i think the challenges for the transaction of the exchange for services and so forth, today, still has lots of obstacles to be overcome, including that of security and privacy. Nonetheless, we look forward to observing and participating in this because i really do think it is the wave of the future. As senator tillis said, we are either going to be responding to it or actively involved and running from it. Thank you. Senator cortez . Senator thank you very much. We appreciate you being here and answering the questions. This is obviously very innovative for all of us and exciting. Have a couple of questions if you thought through some concerns many of us have. One for me is something i dealt with in nevada as the attorney generals the issue of Money Laundering. I know there is clear Regulatory Oversight we have now to address Money Laundering that comes in so many forms, but one is terrorist financing that moneylaundering supports. How will the Libra Association that it isnsuring guarding against any type of Money Laundering activity . Mr. Marcus yes, senator, and this is something i care about deeply, personally. The way we are thinking about protecting the integrity of the network from moneylaundering, criminal activity, terrorism funding, is not only by moving a ash transaction in the digital world, where cash transaction is where most crimes currently happen, and we believe if a lot of transactions move to digital, it will be better. The way we are applying them amount of programs is that as far as the calibra wealth is concerned, we will have strong identity because for every new calibra account opens, you will have to upload a government issued id and as a result, we will have aml programs on the calibra wallet. As far as the Libra Network is concerned, we will have a program as well, and despite the fact Libra Association will be based in switzerland, it will register with the fed and comply with practices. Senator im glad you brought that up because that was my question with the association, would it fall under the Bank Secrecy Act jurisdiction . Mr. Marcus the association will not actually touch consumers. It will just organize it. Senator who will be subject to be Bank Secrecy Act act . Mr. Marcus the calibra wallet and all the while its operating under that jurisdiction will comply with dsa, will have perform and aml programs, and we are engaged with treasury to make sure the setup of the not going tot only take a step back in terms of the secrecy and programs, but it because of the way we are implementing and configuring the network. Senator you are currently talking about getting signoff on how to address Money Laundering . Mr. Marcus we are. Senator i appreciate you providing more transparency around that. Let me just say, this is a new day and age. Cash andomes to carrying around a briefcase full of cash, criminals and executives dont do that anymore. What you are creating is an opportunity for them to engage in continuing moneylaundering and criminal activity. So, know that. That is one. To say we are owing to be activities is the one thing, but i want to see the specifics, so i appreciate you talking with us about how to address the issue. Another one that has come up is i sit on the Banking Committee here, and we have talked about sanctions laws. Policy communication and libra was on a podcast and asked how libra would react if the United States government required libra black list addresses in order to comply with sanction laws and the response was the association will not interact with any jurisdiction. It will instead leave that to the entities that provide an on and off ramp to libra, the currency. Can you clarify that . How are we supposed to address this issue when it comes to blacklisting and sanctions law . Mr. Marcus this is a question we are also engaged with the thesury department on, and one thing we have committed is that we will respect the travel result, perform the right check and including fact checks. This is true for the calibra wallets. I do not know in what context those comments were made, but i believe it may be because the association itself is not running anything. It is just coordinating governance, but the Actual Service providers that are going to be regular Service Providers will enforce travel rule and track checks, and ensure those who are subject will of course perform those functions. Senator i notice my time is up. I have further questions i will submit those for reference. Senator senator kennedy. Going to move kind of fast here. I will apologize in advance if i interrupt you. We only have five minutes. First, i will agree with one of the comments made. We need to encourage innovation. But i want to explore the underpinnings of libra. Can we agree a banker should be trustworthy . Mr. Marcus yes. Senator can we agree a banker should be honest . Mr. Marcus yes. Senator can we agree a banker should respect a customers privacy . Mr. Marcus senator, yes, of course. We are not going to engage in banking. Senator can we agree that ofebook you in the spring 20 16 knew in the spring up knew in the spring of 2016 that russia was attempting through facebook to disrupt the president ial election . Mr. Marcus senator, with regards to those events, we potentially moved to slow senator isnt it true your general and chief security knew in the spring of 2016, isnt it true that mr. Zuckerberg and your see cfo, is itndberg, new in 2016, also truly did not tell your board of directors, they did not tell them until 2017 . Until september 2017, isnt that accurate . Mr. Marcus senator, we definitely moved to recognize the activities happening on the platform. Senator excuse me to interrupt but we only have five minutes. In september 2017, when Senior Management told your board of directors facebook also issued a statement. It said, yeah, the russians have tried to disrupt the election through facebook, but they have already spent hundred thousand dollars and that was a lie, was in it . Wasnt it . Mr. Marcus im sorry, senator. Senator that was a lie, wasnt it . Mr. Marcus i dont believe it was. Emma later, facebook align senator later, facebook admitted they had reached 126 laypeople, didnt they . Mr. Marcus no, senator, i believe the people who answer that question at the time answer to the best of their knowledge at the time. Mr. Zuckerberg was conducting his listening tour across the whole Country First was of 2017, when he feeding cows in wisconsin and having dinner with refugees in minneapolis, he knew about the russian involvement, didnt he . Mr. Marcus i dont know, senator. Senator he didnt say anything, did he . Mr. Marcus i do not remember the timeline, senator. Senator ok. Mr. Marcus in the spring of 2017, spring and summer, our Intelligence Committee in the u. S. Senate started investigating the russian attempts to disrupt the election through facebook. Facebook issued a statement saying there were no such attempts. That was a lie, wasnt it . Mr. Marcus i do not remember the timeline and i believe people have also answered truthfully with information they had at the time. Senator in june 2018, we found that facebook was using user data with device makers, a whole bunch, amazon, like yourself, samsung. Facebook did not disclose that to the user, did it . Mr. Marcus my understanding, again, it was not my responsibility or my team, that this was designed to enable those phone manufacturers to build integration within the facebook product to serve those consumers using these devices. Mr. Marcus youre out senator your algorithms are such that if i watch a video on a topic, im immediately shown videos on more extreme versions of that topic. We call that stickiness, is that correct . Mr. Marcus this is not the way the facebook platform operates today, senator. Senator but it did for a long time, right . Mr. Marcus senator, mark really led through the change. Senator wouldnt we agree on this that facebook has now become the major news source for many people, probably the major news source . Is that true . Mr. Marcus i dont believe it is. I believe more and more people are interactive senator 60 of their users say they get news off facebook as their primary source. And i really want your opinion that facebook has chosen to advance a set of values in which truthful displaced by been flagrant displays of [expletive] . Mr. Marcus i dont have an answer to that question, sir. [laughter] senator here is my last question, and i agree with senator toomey, i have Great Respect for facebook, but facebook now wants to control the money supply. What could possibly go wrong . Mr. Marcus senator, we will not control libra the currency or the association, and we agree that no company should control such a network or digital currency. Senator i would like a second round, if we could . To doan i would be glad that for senators if we have time. Senator smith . Senator thank you. Welcome. So, i got a lot of questions about this. You will understand the level of skepticism you see here, and i appreciate you being here to answer our questions. I want to try to understand better disassociation. So the Libra Association expects you to have about 100 founding members who together you say, well, we will make decisions about investment strategy, who isory compliance, in charge . Themarcus the way governance of the Association Works is that you have this council of 100 or more members that will make decisions and elect a board that will be five and 19 members, and that board will elect a managing director and the association will have a staff to perform the governance function that it is supposed to look after. Senator in the united senate, we also have 100 members but it is clear who was in charge, Mitch Mcconnell is in charge. Trying to understand chairman i am a chair. Chair crapo is in charge. Im trying to understand, will decisions be made on a consensus basis . I understand there is a two thirds majority. Help me understand how decisions get made. Mr. Marcus of course. The decisions are basically the structure of the governance is one where there are certain things which should be hard to importantd those are things to the spirit of how the network is supposed operate, the spirit in which the reserve is supposed to operate. I believe when it comes to the reserve, we will need oversight. Senator will there be a constitutional body of rules that would be agree to ahead of time that would guide the decisionmaking . Mr. Marcus yes, and it will be made public. Senator and how do you look at minority rights versus majority rights versus majority writes on the board . Mr. Marcus as it stands, the every member, will have equal voice. Senator what if there is a disagreement . Automaticallyy overwhelmed by the majority . Mr. Marcus it will depend on the type of decision. Not all decisions will need super majority. Senator so it seems to me possible on any board or group me thats, it seems to there is a big question about how every voice is going to be heard in this incredibly powerful association switzerland. In is this the corporate board, what if their conflicts of interest developed . Mr. Marcus we hope to avoid conflicts of interest, of course, but we have a lot of work to do between now and the launch. This is why we shared the paper early on, to get the feedback all thet to address concerns and get proper Regulatory Oversight and part of that, there is also going to be governance of the association. Senator i think these are really important questions. We are imagining this association headquartered in switzerland. It would have amazing power over the Financial Health of this constituents,my so i think these questions of accountability are extremely important. Let me switch topics a little bit. What is the longterm Business Opportunity for facebook here . Mr. Marcus senator, two business opportunities. One is really the ability for the 90 million Small Businesses and the many users on the pot on to transact with one another. As a result, more commerce on the facebook platform and our family of apps. If there is more commerce, there will be more advertising revenue for facebook, so that is one indirect effect. Senator more commercial activity on facebook equals more money for facebook . More money . Mr. Marcus yes, senator. The other part of it is if we earn Peoples Trust with the calibra wallet, and they decide to use it over time, we can offer partnerships like Financial Institutions and banks and other services that will be new sources of revenue. Senator so competing on wallets and getting a bigger market share. It seems to me, and i know im out of time, it seems to me that what facebook is really good at is figuring out how to monetize peoples personal data, not only directlya spec its but the ambience facebook collects from the many millions of activities that we take every year. What facebook is really good at literally, ong, that data. I have to say im not reassured by your statement that you cannot see any reason right now why there would not be data sharing between these platforms. I have additional questions for the record, mr. Chair. Chairman senator mick sally . Senator thank you. Mr. Marcus, i dont trust facebook, and it is because of the repeated violations of your users privacy, repeated deceit, and im not alone. As you know. In 2011, there was a dissent decree with the federal trade commission related to your privacy practices, so that is where it started with investigative bodies, but it has not edited, even act ended. Decree,er the dissent facebook is under investigation again. Facebook faced a fine of 5 billion recently because of your repeated violations of your users information. For example, without users permission, sharing personal Profile Information with outside Software Developers and selling that off. Data breaches. Allegations you repeatedly changed user privacy settings with no notice. The sec is also investigating events surrounding personal information from facebook. The office of attorney general the micek into authorization of facebook users and a mellow address is. And it isallegations one after another, after another. I dont trust you guys. Instead of cleaning up your house, you are launching into another Business Model with calibra, and you have got documents that talk about your privacy commitment from calibra. And that privacy commitment, you say that you will not be sharing account information or Financial Data with facebook or any third Party Without customer consent, so how do we know this is not going to change, and how do we know youre going to do that based on your track record of failing, violating and deceiving in the past. Mr. Marcus totally for question. I want to answer it in two parts. Know,rst is that, as you we have been working really, really hard on addressing the issues. Some of them you have raised. We have invested incredible resources and Election Integrity and privacy. Mark has made it his top we will continue to do that until they are addressed to satisfaction. On the reverse side, we have designed this network in such a way that facebook does not and will not control it or the currency, and there will be plenty of competition. I want to take a moment to explain why there will be a lot of competition. First, there is interoperability , so regardless of the wallet you choose, youll be able to pay across wallets, senator i dont want to get into the technical stuff. Im talking about the trust issue. You violated privacy in the past as a company, you continue to issues, you continue to change the privacy and roles without not without informing users. Yet, you launch a new product and you claim privacy will be protected, so how should users know that also will not change and he will not be violated . The core issue is trust. Mr. Marcus the point is it really that people can get all of the benefit from this Network Without using our wallet, and i know we will have to earn these People Stress for a long time in of them get the benefit wanting to use the calibra wallet instead of any others they have the choice of. Senator i know senator toomey asked the question, your privacy document said calibra will be transparent, offering customers controls using simple language and easy to find privacy control that detailed the Data Collected and what for. You are telling me, the user will not be able to have consent as to data being collected . Mr. Marcus im sorry, i dont understand the question. , youor ok, for calibra specifically say in your privacy document that it will be easy to understand controls on what data is collected, so will the user for their data being collected when the use calibra . Mr. Marcus yes. Senator do they have to consent to use libra . Mr. Marcus yes. Senator so there really is no choice. In order to use it, you have to use your data. There is no reason to opt out. Mr. Marcus if you want to use the calibra wallet, you will have to authenticate and upload a government issue id, and if consumers dont want us to collect government issue id in the first steps, then of course they will not be able to use the service because we will be compliant to qac regulation. Mr. Marcus what is the visit senator what is the business . Odel of calibra you mentioned the interface of facebook that the more people are using it, the more people will stay on facebook and you can continue to collect their personal information and target them with ads and sell the information. Is that the Business Model. Mr. Marcus with respect, senator, that is not what i said. Senator but that is actually what happened. Mr. Marcus i will focus on the specific question you asked, which is that we have 90 million businesses. Ma