Meta, the parent company of social media giant Facebook, is once again in hot water due to cryptocurrency scam ads.
According to a recent report published by The Wall Street Journal, the Australian Competition and Consumer Commission, the chief competition regulator in Australia, has taken the tech giant to court, alleging that it had failed to decisively clamp down on fake celebrity endorsements.
Commission Chair Rod Sims says that the company should have done more to protect users from malicious ads.
Meta, however, asserts that it has been cooperating with the regulator while touting its scam-detecting technology.
Numerous prominent Australian personalities, such as politician Mike Baird, have become embroiled in cryptocurrency fraud schemes, with their names being invertedly used for promoting such products.
The modus operandi has been more or less the same for years: scammers typically post fake news articles with convincing quotations from celebrities that are meant to lure people into investing in a crypto sham.
While seasoned crypto users are very unlikely to fall prey to such scams, it is not uncommon for ordinary people to part with their money in such a way. The regulator says that a single victim can lose $450,000 after clicking a fake cryptocurrency ad.
Such a problem is, of course, not limited to Australia. Politicians, movie stars and TV hosts from all corners of the globe have found themselves promoting fraudulent cryptocurrency products on social media without knowing anything about it. Some celebrities have personally called out their impersonators. Danish actor Mads Mikkelsen, for instance, cautioned his followers against trusting cryptocurrency articles using his name.
Financial campaigner Martin Lewis went as far as suing Facebook over fake crypto ads using his name before dropping the lawsuit in early 2019.
If Meta loses the suit filed by the Australian regulator, it will have to pay millions of dollars worth of fines.
Alex Dovbnya (aka AlexMorris) is a cryptocurrency expert, trader and journalist with extensive experience of covering everything related to the burgeoning industry — from price analysis to Blockchain disruption. Alex authored more than 1,000 stories for U.Today, CryptoComes and other fintech media outlets. He’s particularly interested in regulatory trends around the globe that are shaping the future of digital assets, can be contacted at firstname.lastname@example.org.
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