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Cryptocurrency company Ripple sues YouTube over scam videos

Cryptocurrency company Ripple sues YouTube over scam videos
Written by publisher team

Cryptocurrency firm Ripple is suing YouTube for its “inexplicable failure” to prevent fraudsters from impersonating its CEO. In a complaint filed today, Ripple accused the video platform of selling ads and verifying accounts promoting fake crypto gifts, then ignoring complaints about them.

Ripple operates a network of digital currency exchange XRP, which is aimed at people who want to send money internationally. Over the past several months, scammers have created official accounts for Ripple and its CEO Brad Garlinghouse. It appears that some accounts have been stolen from successful YouTubers whose accounts have been hacked, giving the scammers hundreds of thousands of subscribers. From there, they can post videos offering big XRP rewards for smaller initial payments, impressing viewers who thought they were watching Ripple’s channel.

One fake account made news last month, and Ripple dated the issue to at least November of last year, saying it had filed about 350 complaints about impersonation or fraud. But she says YouTube has “ignored or otherwise failed to address” many of them. In one case, he apparently gave a hacked channel an official verification badge. And Ripple claims that even after being warned about the scam, YouTube continued to accept paid ads related to it. The result was an “attack” of messages from people who believed Ripple had stolen their money or hacked their account. It is not clear how much money the scammers took in total, but it appears that one account received $15,000 worth of XRP.

Cryptocurrency scams have been a long-standing problem on large web platforms. In 2018, British financial journalist Martin Lewis sued Facebook for defamation after it accepted ads linking his name to get-rich-quick schemes. Facebook settled the lawsuit by making a donation to the fraud prevention initiative last year.

Among other things, Ripple accuses YouTube of violating contributing trademarks for ignoring complaints and continuing to accept money for deceptive ads. Section 230 of the Communications Decency Act broadly protects websites from liability for third party content, even if the website promotes or encourages such content. (Although Ripple can find and sue people who infringe on its trademark, that’s not a straightforward task.) But there is an exception to this rule for some intellectual property claims, which—along with the argument that YouTube takes money for ads that impersonate Ripple – can hold the case.

Ripple says it is filing the lawsuit to “spur industry-wide behavioral change and set expectations for accountability”. So it’s possible for the company to consider it a win if this is just an advertisement for the YouTube fraud issue – even if there’s no legal culpability involved.

In a statement to the edge“We take abuse of our platform very seriously, and take prompt action when we discover violations of our policies, such as scams or impersonation,” a YouTube spokesperson said.

Update 4:15 PM ET: Statement added from YouTube.

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