A crypto scam on YouTube had recently seen scammers impersonate popular blockchain company Ripple’s CEO Brad Garlinghouse to promote a fake XRP giveaway and dupe investors. The event resulted in Garlinghouse filing a lawsuit against YouTube. The lawsuit stated:
“Ripple has repeatedly demanded that YouTube take action to stop the Scam and prevent further harm. Yet YouTube refuses, even where the same scheme is replicated time and again on its platform. YouTube’s response has been woefully inadequate and incomplete. As a result, Ripple and Mr. Garlinghouse continue to suffer substantial reputational harm.”
Months after the filing, YouTube’s legal team has now responded arguing that the impersonators were third-parties and the company has no liability in crypto scams promoted via its video content or descriptions.
The lawyers defending YouTube added that Section 230 of the Communications Decency Act that protects platform publishers from liability over the information provided by third parties, is applicable in this scenario.
They argued that despite YouTube’s “unwitting verification” of channels being run by scammers, the content was created by third parties and not the platform itself, this fact remains unchanged. They claim that since Ripple is not alleging YouTube “solicited, encouraged, or participated in the third-party fraudsters’ scam,” the platform has no liability.
Ripples lawsuit had pointed out 305 channels impersonating Gralinghouse, with some even taking over verified accounts and modifying the channel to make it look legitimate to easily promote the scam.
However, YouTube’s legal team added that “the right of publicity law protects individuals’ names, images or voices from being used for commercial purposes without permission, but Ripple’s suit alleges that a third-party hacker employed Garlinghouse’s identity in its videos, not YouTube.”
YouTube and Scammers
This isn’t the first instance of scammers impersonating influential people or organizations on YouTube to promote scams.
Back in June, scammers hacked some verified YouTube accounts and modified it to look like the official SpaceX YouTube Channel. The scammers then broadcasted an old interview of CEO Elon Musk on live stream and managed to fool almost 80,000 people.
The scammers defrauded viewers of 15.31 BTC since June 8, with one wallet receiving 29 transactions amounting to 4.08 BTC. Another wallet received 84 “donations” totaling 11.23 BTC, worth $110K at the time.
The following month, 38,000 viewers were watching another scam YouTube stream that was targeted at defrauding users of VeChain VET tokens.
Via the live stream, the hackers promised to give back double the tokens that were sent to their wallet addresses. More than 320,000 VET were deposited, and shockingly, no tokens have been returned.