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Cryptocurrency firm Ripple is suing YouTube for its “inexplicable failure” to stop scammers from impersonating its CEO. In a complaint filed today, Ripple accused the video platform of selling ads and verifying accounts promoting fake cryptocurrency giveaways, then ignoring complaints about them.
Ripple operates an exchange network for the XRP digital currency, which caters to people who want to send money internationally. Over the past few months, scammers have created official sounding accounts for Ripple and its CEO Brad Garlinghouse. Some accounts have apparently been stolen by successful YouTubers who have their accounts hacked, giving scammers hundreds of thousands of subscribers. From there, they could post videos that offered big XRP rewards in exchange for smaller initial payments, fooling viewers into thinking they were watching Ripple’s channel.
A fake account made headlines last month, and Ripple dated the issue to at least November last year, saying it has filed around 350 complaints for identity theft or scam. But he says YouTube “ignored or otherwise failed to address” many of them. In one case, he apparently gave a compromised channel an official verification badge. And Ripple claims that even after being warned of the scam, YouTube continued to accept paid ads related to it. The result was a “onslaught” of messages from people who believed Ripple had stolen their money or hacked their accounts. It’s unclear how much money the scammers took in total, but one account apparently made $ 15,000 worth of XRP.
Cryptocurrency scams are a long-standing problem on large web platforms. In 2018, British financial journalist Martin Lewis sued Facebook for libel after accepting ads tying his name to get-rich-quick schemes. Facebook solved the lawsuit with a donation to a scam prevention initiative last year.
Among other things, Ripple accuses YouTube of contributing to trademark infringement by ignoring complaints and continuing to accept money for scam ads. Section 230 of the Communications Decency Act extensively protects Web sites from liability for third party content, even if the site promotes or encourages such content. (While Ripple could find and sue people who infringe its trademark, this is far from a simple task.) But there is an exception to this rule for some intellectual property claims, which, combined with the argument that YouTube is taking money for ads impersonating Ripple – could complicate the case.
Ripple says it has filed a lawsuit to “urge industry-wide behavior change and establish the expectation of accountability.” So it’s possible the company will call it a win if it simply advertises the scam problem on YouTube, even if no legal censorship is involved.
In a statement a The Verge, a YouTube spokesperson said that “we take abuse of our platform seriously and act quickly when we detect violations of our policies, such as fraud or identity theft.”
Update 16:15 ET: Statement added by YouTube.
