According to a new report from The Washington Post, about a dozen fake pages advertising various Libra cryptocurrency exchanges and promotions have been spotted on Facebook and Instagram. The pages purportedly offer deals for people to buy Libra coins at a discount, despite the fact that Libra will not launch until sometimes next year at the earliest — if it ever does.
While there already is an overwhelming prevalence of cryptocurrency scams , the extremely close likeness that these pages bear to legitimate Libra sites and branding makes them that much more likely to snare unwitting consumers.
The architecture of the cryptocurrency which, ironically, was designed to make it appear more trustworthy to wary consumers outside the cryptocurrency sphere makes it especially susceptible to the discount exchange scams the report uncovered. In order to keep the value from fluctuating, consumers must convert fiat currency into an equivalent sum of Libra coins, which are then held in a reserve controlled by the Libra Association. Since currency exchange lies at the heart of Libra’s structure, fraud that preys on this component, and offers such an enticing deal to get ahead of the pack, would be well-positioned to fool overeager early adopters.
While the report identified relatively few fraudulent pages for a cryptocurrency with such immense ambitions, the emergence of these scams so early on will undoubtedly make things tougher for Facebook. In fact, considering that the governments of the United States and India have expressed a strong interest in regulating Libra, this latest development may very well embolden these nascent regulatory efforts.
With all of these incentives for Facebook to address con artists abusing Facebook’s own cryptocurrency on its own platforms, the company has been conspicuously slow to combat these pages. It could just be that Facebook is still struggling with content moderation on all fronts, including even those interests which are closest to it. It’s also possible that this oversight is a combination of this intricate content moderation transition along with Facebook’s business model of profiting from any and all forms of engagement, whether or not the claims made by posts are accurate.
Regardless of Facebook’s ability or willingness to crack down on bogus Libra exchanges, the fact that a spate of them was independently exposed means that Facebook will likely have to delay Libra’s launch further if it hopes to appease regulators.