Facebook sued in Australia for fake crypto ads

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A few weeks ago, Australia’s rich­est man, Andrew For­rest, was forced to file crim­i­nal charges against Meta for allow­ing cryp­to scam ads with his name and age.

Now, the Aus­tralian Com­pe­ti­tion & Con­sumer Com­mis­sion (ACCC) has com­menced legal action against the par­ent com­pa­ny of Face­book due to its inabil­i­ty to curb the spread of such posts on its site.

Australia goes after Meta for crypto scam ads

Face­book has become one of the most used plat­forms by cryp­to scam­mers to pro­mote fake mon­ey-mak­ing schemes. Cryp­to scam­mers have pro­lif­er­at­ed these pro­mo­tions using the image and name of famous peo­ple rang­ing from Elon Musk to Vita­lik Buterin to even those who aren’t con­nect­ed to cryp­to like Andrew Forrest.

The con­sumer pro­tec­tion watch­dog stat­ed that the ads could have mis­led Face­book users who believed they were pro­mo­tions by famous Aus­tralians. These ads used names and images of politi­cians, tv per­son­al­i­ties, busi­ness lead­ers, etc., and con­tained links to fake media articles.

It also alleges that Face­book “aid­ed and abet­ted or was know­ing­ly con­cerned in false or mis­lead­ing con­duct and rep­re­sen­ta­tions by the advertisers.”

ACCC has since filed the action in a fed­er­al court and would most like­ly be using evi­dence that includes the ones filed by Andrew For­rest a few weeks ago. The min­ing mag­nate crit­i­cized Face­book for allow­ing scam­mers to use his name and image for fake ads.

Nor­mal­ly, the Aus­tralian Secu­ri­ties and Invest­ments Com­mis­sion (ASIC) han­dles this issue. But the ACCC is fil­ing the case due to the con­sumer pro­tec­tion ele­ment of the case.

Inter­est­ing­ly, Zachxbt, a famed cryp­to detec­tive, tweet­ed about how Face­book allowed cryp­to “scams to run ram­pant” on its platform.

Proliferation of crypto scams on social media sites

The issue of cryp­to scam­mers using social media plat­forms to pro­mote their ille­gal activ­i­ties isn’t lim­it­ed to Face­book alone; oth­er pop­u­lar sites like Twit­ter, YouTube, and Insta­gram have also had to deal with this menace.

Accord­ing to a Fed­er­al Trade Com­mis­sion (FTC) report on cryp­to scams on social media, unsus­pect­ing investors lost over $700 mil­lion of their mon­ey to scams per­pe­trat­ed via these sites in 2021. This, accord­ing to anoth­er FTC report, was 12 times high­er than it record­ed in 2020.

As of this Jan­u­ary, cryp­to scams account for most online invest­ments-relat­ed frauds.

How­ev­er, these plat­forms have revealed their will­ing­ness to work with the author­i­ties to curb the use of their plat­forms by these bad actors.

Face­book, in its defense, claimed that these ads vio­lat­ed its poli­cies and that the com­pa­ny was work­ing to block such posts. It added that it’s coop­er­at­ing on the inves­ti­ga­tion and will defend itself appropriately.

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