Aussie Regulator Sues Facebook Parent for Running Crypto Scam Ads

Australia’s competition regulator has taken Mark Zukerberg-led Meta Platforms to court, alleging that its social media unit Facebook allowed scammers to run fake cryptocurrency advertisements.

In the complaint filed on Friday, the Australian Competition & Consumer Commission (ACCC) said that the scammers ran the ads with fake endorsements with images and quotes of several Aussie business leaders, TV hosts and politicians.

The Aussie regulator alleged that the company breached the consumer and investment laws. It has “aided and abetted or was knowingly concerned in false or misleading conduct and representations,” the regulator said.

The regulatory lawsuit against Facebook’s parent came a month after Australian mining tycoon, Andrew Forrest, sued the company as scammers were using his image to promote cryptocurrency scams.

The Social Media Platform Is Responsible

“The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” said the ACCC Chair, Rod Sims. “It is alleged that Meta was aware... scam ads were being displayed on Facebook but did not take sufficient steps to address the issue.”

The legend scam began in 2019, and the fraudsters used high-pressure selling tactics while approaching the potential victims. Sims said that the losses of the targeted victims cannot be determined, but one of the victims was duped AU$650,000 (around $477,000).

Meta has admitted that the fake ads violated its policies, and the company is using technologies to detect and block such fraudulent activities on its platforms. Additionally, the company said that it is cooperating with the ACCC’s investigation, but declined to furnish details as the case is now with the courts.

“We will review the recent filing by the ACCC and intend to defend the proceedings,” a Meta spokesperson told the media.

Meanwhile, many regulators have alarmed investors against the rampant crypto scams, stressing that retail investors should not be lured with the promises of high returns.