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By Drew Harwell ,
Facebook's Libra currency is not yet available for public use. But that hasn't stopped people from attempting to get money for the currency on Facebook and Instagram. (Dado Ruvic/Illustration/File Photo)
A
wave of fakes purporting to sell or represent Facebook’s
not-yet-available Libra currency have swept onto the social-media
giant’s platforms, highlighting how the tech firm is struggling to
rebuild trust and fight the fraud likely to surround the new financial
system.
Roughly a dozen fake accounts, pages and
groups scattered across Facebook and its photo-sharing app Instagram
present themselves as official hubs for the digital currency, in some
cases offering to sell Libra at a discount if viewers visit potentially
fraudulent, third-party websites.
A number of fake Facebook and Instagram accounts were removed Monday after The Washington Post alerted Facebook to their spread.
The
spread of fakes — and Facebook’s inability to detect them on its own —
could undermine Facebook-backed efforts to inspire confidence and
satisfy the regulators now scrutinizing the newly proposed global
currency. Many of the fakes included Facebook’s logo, photos of Facebook
chief Mark Zuckerberg or Libra’s official marketing imagery.
“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,”
said Eswar Prasad, an economics professor at Cornell University.
“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
removes ads and pages that violate our policies when we become aware of
them, and we are constantly working to improve detection of scams on
our platforms,” spokeswoman Elka Looks said in a statement.
Asked
about the fake pages and accounts, Sen. Mark R. Warner, a top Democrat
on the Senate Banking Committee, stressed Monday: “This is another
strong indication Facebook should take a very cautious approach to Libra
and commit not to launching any product until U.S. regulator concerns
are satisfied.”
Many of the fake Facebook pages
and Instagram accounts have followings in the hundreds of users or
appear designed to squat on the Libra name for later use, while others
offer production values high enough to potentially fool a typical user.
The fakes also spread to Twitter, YouTube and other platforms, a sign
that disinformation around Libra could quickly spiral beyond Facebook’s
control.
One fake video that appeared to match
the style of a Facebook video “story” was labeled a “sponsored” post
from an account named “Libra wallet,” and showed Zuckerberg walking
across a stage as a voice called Libra “safe,” “easy to use” and “the
new world’s currency.” The video offered viewers a discount on some of
the “20 million Libra coins” it said had been distributed to early
investors. One viewer said he was sent the video via the popular Chinese
messaging service WeChat, but did not know where it had originated.
For
Facebook, the early rise of fake pages and groups devoted to Libra is
likely to add to its challenges with regulators around the world, who
have blasted the company’s plans as a threat to the financial system. In
the U.S., Federal Reserve chair Jerome H. Powell has expressed “serious
concerns with Libra,” and Treasury Secretary Steven Mnuchin has warned
the government would “not tolerate the use of the cryptocurrencies in
support of illicit activities.”
Democrats and
Republicans echoed those fears at two congressional hearings earlier
this month, where they questioned whether Facebook — already stumbling
in attempts to stop the spread of disinformation and clean up its
privacy practices — might be ill-equipped for the myriad threats that
come from launching its own currency, including money laundering or
fraudulent transactions.
In a “white paper”
on the currency, Libra said it will be backed by a reserve of real
assets, such as bank deposits and government securities, as well as a
network of exchanges that will allow people to buy and sell Libra using
local money “to help instill trust in a new currency.” “We believe that
people will increasingly trust decentralized forms of governance,” the
white paper states.
But the fakes suggest that
spenders, investors and early adopters of the digital currency could be
vulnerable to the same kinds of costly disinformation and online fraud
that have plagued bitcoin and other cryptocurrencies. Even before
launching Libra, Facebook put in place special restrictions targeting those who advertise such offerings.
The
fake pages and groups appear designed to capitalize on the cash and
excitement that some expect could flood into Facebook's financial
product, which would bring the company's considerable resources and
prominence into the unregulated and unchecked world of online
currencies.
One of the websites these fake pages highlighted, buylibracoins.com,
is sleekly designed and appears to copy from Libra’s marketing
materials, while also allowing users to create an account and buy Libra
with bitcoin or other currencies. “We strongly advice [sic] you to
convert any other form of currency you have into them,” the website
states. Owners of that site and several other fakes did not respond to
requests for comment.
The creator of the
“Calibra Digital Wallet” Facebook page, who said he was a Florida-based
digital marketer and cryptocurrency entrepreneur named Trent Partridge,
said he opened the page to capitalize on excitement about the currency’s
launch. “I really wanted a place where people could discuss Libra and
Calibra,” he said about the month-old page, which has seven followers.
“Once things get going, things will be huge.”
Libra
would allow people to send money or buy things without going through a
traditional bank or credit company. “Success will mean that a person
working abroad has a fast and simple way to send money to family back
home, and a college student can pay their rent as easily as they can buy
a coffee,” a Libra marketing document states.
The
Libra Association, a new group launched to oversee the currency, is
said to be backed by a who’s-who of financial giants and other “founding
members,” including Visa, eBay, Mastercard, PayPal and Uber. Its
website says Libra’s “mission is to reinvent money and transform the
global economy so people everywhere can live better lives.”
Visa and PayPal declined to comment. Uber, Mastercard and eBay did not immediately respond to requests for comment.
Svitlana
Volkova, a Pacific Northwest National Laboratory senior scientist who
has researched how people talk about digital currencies on social media,
said the fake pages and scams could pose a major risk to Facebook
investors and Libra partners.
“Of course
cryptocurrency is a very fruitful topic for adversaries to spread
disinformation,” Volkova said. “It’s very dynamically changing like our
political environment,” and like political disinformation can have a
“real-world” and “large scale” impact.
Given
Facebook’s investments in content moderation and artificial
intelligence, Volkova said the company should have the resources to
detect bad information about its products on its own platform.
“We’ve
seen the implications of disinformation spreading across social
networks,” she added. “I don’t think I have to sell you on the
importance of identifying and actually doing something.”
Drew Harwell Drew Harwell is a technology reporter for The Washington Post covering artificial intelligence and the algorithms changing our lives. He joined The Post in 2014 and has covered national business and the Trump companies. Follow
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