Cryptocurrency company Ripple is suing YouTube for its “inexplicable failure” at stopping scammers from impersonating its CEO. In a complaint filed today, Ripple accused the video platform of selling ads and verifying accounts that promote fake cryptocurrency giveaways, then ignoring complaints about them.
Ripple runs an exchange network for the digital currency XRP, which is aimed at people who want to send money internationally. Over the past several months, scammers have created official-sounding accounts for Ripple and its CEO Brad Garlinghouse. Some of the accounts were apparently stolen from successful YouTubers who had their accounts hacked, giving the scammers hundreds of thousands of subscribers. From there, they could post videos offering big XRP rewards in exchange for smaller initial payments, bilking viewers who thought they were watching Ripple’s channel.
One fake account made news last month, and Ripple dates the issue to at least November of last year, saying it’s submitted around 350 complaints about impersonation or scamming. But it says that YouTube “ignored or otherwise failed to address” many of them. In one case, it apparently gave a hacked channel an official verification badge. And Ripple alleges that even after being warned about the scam, YouTube continued to accept paid ads related to it. The result was an “onslaught” of messages from people who believed Ripple had stolen their money or hacked their accounts. It’s not clear how much money the scammers took in total, but one account apparently earned $15,000 worth of XRP.
Cryptocurrency scams have been a long-running problem on large web platforms. In 2018, UK financial journalist Martin Lewis sued Facebook for defamation after it accepted ads that tied his name to get-rich-quick schemes. Facebook settled the suit with a donation to a scam prevention initiative last year.
Among other things, Ripple accuses YouTube of contributory trademark infringement for ignoring complaints and continuing to accept money for the scammy ads. Section 230 of the Communications Decency Act broadly protects websites from liability over third-party content, even if the site promotes or encourages that content. (While Ripple could find and sue the people infringing on its trademark, that’s far from a straightforward task.) But there’s 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’s filing the suit to “prompt an industry wide-behavior change and set the expectation of accountability.” So it’s possible that the company would call it a win if this simply publicizes the problem of scams on YouTube — even if there’s no legal censure involved.
In a statement to The Verge, a YouTube spokesperson said that “we take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation.”
Update 4:15PM ET: Added statement from YouTube.