The admission came from the company's chief security officer Alex Stamos, who added that given the overwhelming volume of interactions among its users it was unable to stop all "threat actors", CNBC reported.
However, this has not stopped Facebook from searching for its next billion users, with founder Mark Zuckerberg pushing hard for a means to expand into China.
Stamos also confessed that Facebook often wrongly removed material from its user accounts that was found later not to have broken any of the site's rules.
Stamos claimed that Facebook's rules were to blame for this helplessness in the face of material that was deemed unsuitable for public consumption, but put the blame on the technical challenges in laying down the law.
While some have accused Facebook of jumping the gun when it comes to censoring material, others have said the social media network is too lax when it comes to allowing terrorists to use the medium for nefarious purposes.
Also present at the discussion was the Electronic Frontier Foundation's cyber security director Eva Galperin who accused the company of not being transparent about what it deemed unfit for publication and what should be taken down.
But Stamos hit back, saying it was "not just a bunch of white guys" who made the rules.
"When you turn up the volume on hate speech, you'll get more false positives, (and) catch people who are just talking about it," he claimed.
Zuckerberg has said the company plans to recruit 3000 people to inspect posts and take down what is deemed to be offensive.