Coinbase CEO calls Libra scrutiny 'un-American'

Elected officials are worried about Facebook's proposed Libra cryptocurrency, and Brian Armstrong thinks that's downright un-American.

The Coinbase CEO expressed his frustration with senators Brian Schatz and Sherrod Brown on Sunday, writing that letters of caution penned by the two and sent to Stripe, Visa, and Mastercard went a step too far. Specifically, the senators warned the companies — at that point Libra backers — that Facebook had failed to satisfactorily demonstrate how it will prevent the cryptocurrency from being used to, among other things, facilitate terrorist financing.

"You should be concerned," read the letters in part, "that any weaknesses in Facebook's risk management systems will become weaknesses in your systems that you may not be able to effectively mitigate."

The letter was dated Oct. 8. Stripe, Visa, and Mastercard all pulled out of the Libra association on Oct. 11.

"Something feels very un-American about this," responded Armstrong. "Two senators writing to Visa, Mastercard, and Stripe to ask them to withdraw from Libra."

Coinbase, it should be noted, is one of the confirmed initial 21 members of the Libra Council.

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Importantly, nowhere in the letter do Schatz or Brown explicitly ask the companies to withdraw from Libra. Rather, the senators repeatedly "urge [Stripe, Mastercard, and Visa] to proceed with caution" and lets their respective CEOs know that "if you take this on, you can expect a high level of scrutiny from regulators not only on Libra-related payment activities, but on all payment activities."

Stripe, Visa, and Mastercard are, among other things, payment processing companies. As such, to Armstrong's credit, it's not a stretch to read these letters as thinly veiled threats.

Still, warning a company that a future action will open it up to additional scrutiny isn't the same thing as asking a company not to do something. Rather, it's giving said company a heads up that the thing it is about to do is, well, questionable.

It seems that Stripe, Mastercard, and Visa all took that warning seriously. Coinbase, meanwhile, appears to be charging full steam ahead. But hey, if your dream is to "overthrow some corrupt dictators in the world," then brushing aside a congressional letter of warning is just another day at the office.