Facebook is Secretly Working on Blockchain, Crypto Projects

  • Facebook has hired many former PayPal executives to form part of its Blockchain-focused research group.
  • Facebook's employees have previously pitched the idea of launching the company's own cryptocurrency.

Social media giant Facebook has formed a small blockchain technology research group which reportedly aims to disrupt the world’s traditional payments industry. However, Facebook has experienced problems recruiting qualified personnel due to the rising number of public scandals associated with the multi-billion dollar social networking platform.

Hiring Academics, Software Engineers, Legal Experts 

As CryptoGlobe recently covered, Facebook is actively searching for product managers, academics, software engineers, and legal experts who have some experience working in the digital currency space and/or payments industry. At present, there are about 40 professionals, which include former PayPal employees, that are part of Facebook’s blockchain-focused group.

Facebook’s distributed ledger technology (DLT)-focused research team, formed 8 months ago in May, has reportedly sent staff members to blockchain-related conferences worldwide. The company aims to further expand its current team, which is dedicated to studying potential applications and use cases for DLT, by recruiting more cryptographers, and qualified researchers.

According to sources familiar with the matter, Facebook’s employees have pitched the idea of developing a decentralized cryptocurrency for the social media platform. Facebook’s job descriptions note that the firm’s blockchain team aims to “help billions of people with access to things they don't have now.” This may include things “like equitable financial services, new ways to save, or new ways to share information”, Facebook’s job listing mentions.

Facebook Reluctant To Disclose Details On Its Blockchain Initiatives

When asked to comment about Facebook’s crypto and blockchain-related initiatives, a Facebook representative told Cheddar that not much has changed in terms of the company’s initial business strategy for developing DLT-related products and services. The Facebook spokesperson also referred to a previous statement that the social media network’s management team had issued:

Like many other companies Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.

Notably, Facebook’s talented blockchain group includes David Marcus, the former president at PayPal and VP of Messenger at Facebook. Kevin Weil, the former Instagram product chief, and James Everingham, the head of engineering at Instagram, have also joined Facebook’s DLT-focused research group.

Geoff Teehan, who used to work on Facebook’s News Feed, has now been appointed the director of product design for Blockchain at Facebook.

Sources: BitGo Co-Founder Working For Facebook As Advisor

Notably, there are many former PayPal executives that Marcus has recently hired to form part of Facebook’s DLT-focused research team - which suggests that the social media giant might be developing its own cryptocurrency.

Christina Smedley, a former global communications head at PayPal, is now head of branding and marketing for Blockchain at Facebook. Tomer Barel, who was previously in charge of PayPal’s fraud and risk management department, has been appointed as VP of risk and operations for Blockchain at Facebook.

Ben Davenport, the co-founder of BitGo, a cryptoasset wallet and blockchain security firm, is currently an advisor at Facebook’s blockchain group, according to sources familar with the matter.

Notably, non-employees that want to learn more about Facebook’s blockchain-related plans have been asked to sign nondisclosure agreements (NDAs). Sources with knowledge of Facebook’s policies have also revealed that even those who have already been recruited by the company for blockchain-related projects haven’t been informed about all the details related to the firm’s secretive initiative.

38% of Crypto Exchanges Interact With High-Risk Entities in 25% or More of Their Transactions

Leading cryptoasset data provider CryptoCompare has published an updated version of its cryptocurrency Exchange Benchmark. The report details that 38% of crypto exchanges interact with high-risk entities in 25% or more of their transactions.

According to CryptoCompare’s Exchange Benchmark, interactions with high-risk entities are considered when the cryptoasset data provider is raking exchanges. These interactions are measured according to CipherTrace’s Interaction Risk Score, which profiles transactional risk by “deanonymizing risky entities and illicit activities to identify criminal sources of funds and money laundering exposure.”

CryptoCompare then scores exchanges according to the percentage of transactions conducted with entities deemed high-risk. These include criminals, darknet markets and vendors, gambling projects, malware operators, cryptocurrency mixers, ransomware operators, and OFAC sanctions addresses.

The benchmark details that addresses with up to 25% of transactions conducted with these entities receive some points, but those above said mark receive none. Notably, 38% of cryptoasset exchanges were above it.

Data shared in the report detailed that Top-Tier cryptoasset exchanges, those graded AA to B in the report, interact less with these entities, while Lower-Tier exchanges, those rated C-E, interacted more. While both AA-related exchanges, Coinbase and Gemini, had no interactions with high-risk entities, some of the exchanges with A, BB, and B ratings did.

As CryptoGlobe reported, the Exchange Benchmark also revealed Top-Tier exchanges are gaining market share against Lower-Tier exchanges. It details that top-tier exchanges accounted for 32% of the global volumes in Q4 2019, while in the first quarter of this year they accounted for 36%.

In the second quarter of 2020, the Top-Tier exchanges already accounted for 40% of the global trading volume. In June these exchanges got to a 46% market share. Lower-Tier Exchanges, have seen their share of the space’s total trading volume drop from 68% to 60% in the last three quarters.

Featured image via Pixabay.