Youtube has been dragged into a class action lawsuit against Bitconnect for failure to protect its users from being exposed to the scam’s videos. This case might be used by Google and others to justify their bans on crypto ads, arguing that their algorithms can not distinguish between legitimate projects and frauds.
Also Read: No Insider Trading, Market Manipulation and Misleading Ads – Malta’s New Crypto Law
Youtube to Blame for Bitconnect?
Youtube has been added as a defendant in a class action lawsuit against Bitconnect recently, evident by publicly available documents filed with the Southern District Court of Florida. According to the lawsuit, the Google-owned video platform failed to protect or warn its users from Bitconnect affiliates’ promotional material, which reached over 70,000 hours and 58 million views on Youtube.
“Several of the Affiliate Promoter Defendants had partnerships with YOUTUBE pursuant to which the BITCONNECT Defendants disseminated fraudulent and harmful content unsuspecting victims across the globe. YOUTUBE was negligent in failing to warn those victims of the harmful content for which YOUTUBE compensated their creators and publishers,” the document alleges. Another segment reads: ”In short, aided by YOUTUBE’s negligent failure to warn, the BITCONNECT Defendants defrauded tens of thousands of investors by capitalizing on the general public’s excitement for virtual currencies and by luring unsuspecting investors into purchasing unregistered securities and participating in pyramid/Ponzi schemes.”
“Wide-Reaching Ponzi Scheme”
As we reported earlier this year, the original complaint has been filed by Charles Wildes, Francisco Doria, Aric Harod, Akiva Katz, James Gurry, and Ronald Nelson – represented by the law firm of Silver Miller – made on behalf of all Bitconnect customers. The plaintiffs stated that Bitconnect’s former $2.5 billion market capitalization was “built through the use of fraudulent means,” in particular “a wide-reaching Ponzi scheme that defrauded investors, made a mockery of state and federal securities laws, and employed an army of social media mercenaries who were paid to bring more unsuspecting victims into the fraud.”
After the matter was exposed, a number of prominent people on the platform have called out Youtubers for promoting Bitconnect, including Pewdiepie. Now the accusations go deeper than that, blaming the platform itself, which might have chilling consequences for sharing crypto content on social networks if accepted by the court.
Should media platforms like Youtube be blamed for the content scammers upload? Share your thoughts in the comments section below.
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