A Facebook spokesperson pointed Recode to the update and reiterated that “there is no evidence of abuse or misuse of these passwords.” But the timing of the update — again, during the release of Mueller’s report — doesn’t convey the message that Facebook cares strongly that users are aware of this issue. Facebook is under investigation by numerous government agencies, including the FTC and the DOJ, for its data collection and privacy practices. It’s unclear if issues like unencrypted password storage could play a role in those investigations, but it’s not a good look regardless for a company that is already struggling mightily with user trust.
Source: Facebook stored millions of Instagram passwords unencrypted – Recode