OpenZeppelin is a startup and third-party audit company that specializes in cryptocurrency. Recently, developers at the company found and patched a weakness in the open-source code of Facebook’s cryptocurrency, Libra.
Libra’s coding is secured, but cryptocurrencies face increased scrutiny
As per reports, OpenZeppelin identified vulnerabilities in the scripting language, Move, that Facebook developed for Libra. Demian Brener, CEO at OpenZeppelin, alleged the vulnerability could have allowed the introduction of harmful executable codes into users’ smart contracts in the guise of inline comments.
Brener added that the blockchain setting of cryptocurrencies can make normally benign issues more severe, especially when trust is replaced by intense auditing.
Following OpenZeppelin’s disclosure of the code to Libra in early August, the Libra team evaluated and secured the code over the subsequent weeks. OpenZeppelin reviewed and confirmed that the patch is secure as of September 4.
Brener emphasized that cryptocurrencies like Libra, which target an international marketplace, must face close scrutiny due to their size, complexity, as well as the amount of money and customers they manage. For this reason, Brener said the importance of audits, like OpenZeppelin’s audit on Libra, will continue to grow.
Libra, like other cryptocurrencies, must meet regulatory standards
US Treasury Under Secretary of Terrorism and Financial Intelligence Sigal Mandelker has stated that Libra must adhere to the highest standards of combating Anti-Money Laundering as well as terrorism financing.
Mandelker told reporters in Geneva that Libra, like any cryptocurrency operating in the US, is obliged to meet US regulatory standards. Following a meeting of Swiss government officials and Bank for International Settlements representatives, Mandelker said that Libra will need to have anti-money laundering and combating terrorism financing built in “from the get-go” in order to satisfy regulatory standards. This also applies to other cryptocurrencies like Ethereum and Bitcoin.
Warning against Facebook’s “siren call”
Other global financial figures have expressed similar misgivings about Facebook’s stablecoin, Libra. Yves Mersch of the European Central Bank urged caution over Libra in a speech to the ECB’s legal conference in Frankfurt, describing it as “beguiling but treacherous.”
Mersch warned Europeans not to be tempted away from the stability of central banks by “Facebook’s siren call”, arguing that regular and established payment solutions offer more “safety and soundness”.
Concerns of US delegation remain
A delegation of US financial regulators visited Libra Association’s Switzerland HQ in August in order to learn more about Facebook’s cryptocurrency project and to meet with local regulators.
Specifically, US lawmakers wanted further information on Libra’s progress and magnitude as well as clarification on how Swiss regulators would manage it.
Despite describing the meetings as “helpful”, the delegation’s head, Representative Maxine Waters, said that some of their concerns remained. Specifically, that a tech company is allowed to create and control an alternative currency with a global reach.
Telegram crypto set to launch before Libra
Meanwhile, instant messaging app Telegram is poised to launch its own cryptocurrency, Gram, by October. This would beat Libra’s own debut as a public cryptocurrency.