Australian Regulator Sues Meta Over ‘Scam’ Crypto Ads
Facebook parent Meta knowingly published crypto ads designed to scam users by leveraging well-known public figures, the ACCC said
Source: Shutterstock
key takeaways
- Facebook-parent Meta is being sued by Australia’s top competition regulator over claims the platform published “scam” crypto ads
- The ACCC is also alleging that Meta was aware of the ongoing activity but it had failed to take “sufficient steps” to stop it
Australia’s top consumer watchdog has begun legal proceedings against Meta, Facebook’s parent company, over allegations it engaged in “false, misleading or deceptive conduct” by publishing “scam” crypto ads on its platform.
The Australian Competition and Consumer Commission (ACCC) said Thursday Meta’s conduct — permitting false ads of “prominent Australian public figures” promoting crypto — was in breach of Australian consumer law.
“It is alleged that Meta was aware that the celebrity endorsement cryptocurrency scam ads were being displayed on Facebook but did not take sufficient steps to address the issue,” the regulator said.
Facebook’s checkered history with crypto-related ads began in 2018 when the platform banned the promotion of most material associated with crypto and blockchain businesses. The platform later reversed its decision to only include initial coin offerings.
Under the platform’s terms, written permission is required for companies to promote trading platforms, software and related services and products that enable monetization, reselling, swapping or staking of crypto.
In light of the ad limitations, the regulator alleges that Meta “aided and abetted” or was “knowingly concerned” of false or misleading conduct and representations by the advertisers.
The watchdog said the ads were likely to “mislead” Facebook users into believing the schemes in the ads were connected with well-known individuals including businessman Dick Smith and TV presenter David Koch.
Advertisements on the platform contained links that forwarded users to false media articles which included quotes associated with well-known Australian public figures promoting certain crypto scams, the regulator said.
In February, Australian billionaire Andrew ‘Twiggy’ Forrest brought criminal proceedings against Meta’s platform, alleging it failed to take preventative measures against false crypto ads that used his image.
The advertisements were, in fact, scams, and the featured celebrities had never approved or endorsed them, the regulator said.
“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” ACCC Chair Rod Sims said.
“It is a key part of Meta’s business to enable advertisers to target users who are most likely to click on the link in an ad to visit the ad’s landing page, using Facebook algorithms.“
Sims added that those visits to landing pages from ads generated “substantial revenue” for Facebook.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- 0xResearch: Alpha directly in your inbox.
- Lightspeed: All things Solana.
- The Drop: Apps, games, memes and more.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
