Democrat proposes censorship of social media to prevent bank run

Sen. Mark Kelly (D-Ariz.) takes the trouble to ask if federal regulators have a way of working with social media companies to crack down on disinformation that could fuel a bank run like the one some say that he may have contributed to the collapse of the Silicon Valley Bank (SVB) last week.

The exchange took place during a Zoom call Sunday with members of both chambers of Congress, their staffers and regulators.

The demise of the SVB shook the financial industry. Regulators, politicians and analysts are trying to figure out why the $200 billion bank collapsed. Deregulation and rate hikes are believed to have contributed to its collapse. It was also allegedly fueled by a bank that two venture capitalists frantically promoted on Twitter.

MP Patrick McHenry (RN.C.) pointed to the role of social media in the SVB’s quick money haul, better known as the bank run.

“This was the first bank run fueled by Twitter. At this point, it’s important to remain level-headed and focus on facts, not speculation, when assessing the right path forward,” said McHenry, chairman of the House Financial Services Committee press release. McHenry also expressed his confidence in the financial system.

Kelly’s question, first reported by journalist Michael Schellenberger, was reportedly asked during a call with the Federal Reserve, the Treasury Department and the Federal Deposit and Insurance Corporation (FDIC) and was based on fears that foreign countries were arming social media could to target the finance system.

Rep. Thomas Massie (R-Ky.) said Schellenberger that Kelly “reasoned concern that foreign actors would do it,” but “did not suggest that censorship should be limited to foreigners or to things that aren’t true.” .”

Massie said that when they called, regulators essentially ignored Kelly’s question.

Rep. Lauren Boebert (R-Colo.) phrased Kelly’s comment slightly differently. Before his name was known, she tweeted that a Democrat had asked if the government was “turning to Facebook and Twitter to monitor misinformation and ‘bad actors’.”

Kelly reportedly denied that he was asking for censorship, insisting he was merely asking about foreign opponents using social media to capitalize on such situations to spread disinformation.

The age of social media has coincided with growing concerns about foreign countries and other bad actors using the internet to spread false information. Russia’s attempts to influence the 2016 presidential election brought this issue into the public eye.

Since then, there have been reports of native troll farms and bots being used for similar purposes. Researchers have recently uncovered a large network of US-based Twitter bots dedicated to promoting former President Donald Trump’s 2024 campaign and mocking his political rivals.

It might be possible to use such networks to attack the financial system, for example by flooding social media with posts claiming that a particular bank or banks are on the brink of collapse, potentially creating a panic like the SVB.

Given that the libertarian VC community often aligns itself with Republicans, conservatives were quick to blast Kelly for questioning whether the government was working with social media platforms to monitor or censor such content.

When someone suggested that Massie should have pushed Kelly back at the moment instead of venting his comment to the press, he answered sarcastic: “You’re right. I should have politely explained the basic principles of freedom to him, and then he would have seen his mistake. Missed opportunity!”

A Twitter user who describes himself as “1A 2A Patriot”. called that Kelly is “a traitor” and that there should be “military trials.”

Republicans have long claimed that social media companies are in cahoots with Democrats to stifle conservative content. Although some believe both parties want to regulate online speech, conservatives widely saw Kelly’s question as further evidence.

Schellenberger, who published the story, framed Kelly’s question as an example of “growing demands from Democrats for more censorship by social media companies.”

A popular right-wing Twitter user commented, “Arizona Senator Mark Kelly asked if social media companies can censor users to prevent bank runs. Democratic politicians don’t even try to hide their attempts to suppress free speech.”

We crawl the web so you don’t have to.

Sign up for the Daily Dot newsletter to get the best and worst of the web delivered to your inbox every day.