One of the challenges the blockchain and crypto space has had to face has been a large number of scams, Ponzi schemes, and frauds. This fraudulent activity gives the industry a bad name with dire consequences. According to Ripple: “In a nascent industry, such as crypto and blockchain, scams and giveaways only impede the industry’s innovation and progress.”
Ripple files lawsuit against YouTube
This is why today, on April 21st, Ripple has taken legal action against YouTube to prompt an industry wide-behavior change and set the expectation of accountability.
According to the complaint, Garlinghouse and Ripple accuse YouTube of damaging their brand and reputations, and demand an unspecified amount of financial compensation. The complaint calls on the video platform to be more aggressive and proactive in identifying these scams, before they’re posted, for faster removal of these scams once they are identified and lastly, to not profit from these scams.
The alleged scams in question resemble those found on other social media platforms, and typically use the image of prominent executives to offer “giveaways.” In most cases, the scammers ask for a small sum in order to send a larger amount back to the sender’s address. Similar scams have been found on other social media platforms like Twitter and Medium.
In the case of YouTube, the complaint cites numerous instances where hackers took over the channels of legitimate creators and replaced their videos with ones advertising Ripple-related scams. The scammers even obtained verification badges, which YouTube purports to reserve for channels that are “authentic”. A verified account can live stream, upload videos longer than 15 minutes, and add custom thumbnails to videos. Scammers have used all these privileges to promote the scam.
According to the complaint, YouTube fails to adequately restrict the spread of such videos, and even profits from them by letting the scammers pay to promote them. These promotions allegedly involve the scammers buying keywords like “Ripple” and “Brad Garlinghouse” in order to target the videos to people searching for such terms.
The complaint adds that Ripple employs a third-party firm to track such scams, and instruct social media companies to remove such scams. Yet, despite sending hundreds of notices to YouTube, Ripple says the media giant has responded slowly or not at all.
In an interview with Fortune, Garlinghouse said he decided to sue YouTube in response to the troubles he encountered in trying to remove a wave of social media accounts impersonating him. He also expressed sympathy for the victims of the scams and described a spate of violent threats he has received from those who falsely believed he had conspired to steal their money. Ripple will use any damages or settlement money it receives from the case to reimburse victims fleeced by the YouTube scams.
Garlinghouse, stated that he and Ripple chose to single out YouTube because the other social media platforms have been relatively more responsive to complaints about scammers and fake accounts. He added that more crypto crooks are migrating to YouTube in recent months, and accused the media giant of failing to make a serious effort to curtail them.
How big is the problem?
XRParcade has done some digging to see how many such channels and scams exist on YouTube.
One such video posted by “Ripple Inc” has been on YouTube for a month, with more than 14 000 views.
“Ripple Worldwide” has been live streaming for 11 hours with 14 000 viewers. This channel has 342 000 subscribers.
“Ripple Global” with 543 000 subscribers has been live streaming the scam for more than an hour.
“Ripple Labs” with 256 000 subscribers, live streamed on April 19. The video currently has 11 000 views.
All these videos (and many more) use Brad Garlinghouse (Ripple CEO) as the face of the scam. These channels are all, of course, fake and not the official Ripple channel.
According to research by xrplorer, XRP accounts associated with these “giveaway” scams are in possession of at least ~5.9M XRP with many funds laundered every day through exchanges and swap services.
Call to action
Ripple believes it’s time to end this unacceptable behavior and protect friends, family members and consumers everywhere. YouTube and other big technology and social media platforms must be held accountable for not implementing sufficient processes for fighting these scams.