Sebastian Sinclair

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 <ul>
 <li>Facebook-parent Meta is being sued by Australia&#8217;s top competition regulator over claims the platform published &#8220;scam&#8221; crypto ads</li>
 <li>The ACCC is also alleging that Meta was aware of the ongoing activity but it had failed to take &#8220;sufficient steps&#8221; to stop it</li>
 </ul>
 
</div>



Australia&#8217;s top consumer watchdog has begun legal proceedings against Meta, Facebook&#8217;s parent company, over allegations it engaged in &#8220;false, misleading or deceptive conduct&#8221; by publishing &#8220;scam&#8221; crypto ads on its platform.



The Australian Competition and Consumer Commission (ACCC) <a href="https://www.accc.gov.au/media-release/accc-takes-action-over-alleged-misleading-conduct-by-meta-for-publishing-scam-celebrity-crypto-ads-on-facebook" target="_blank" rel="noreferrer noopener">said Thursday</a> Meta&#8217;s conduct — permitting false ads of &#8220;prominent Australian public figures&#8221; promoting crypto — was in breach of Australian consumer law.



&#8220;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,&#8221; the regulator said.



Facebook&#8217;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&#8217;s terms, <a href="https://www.facebook.com/policies/ads/restricted_content/cryptocurrency_products_and_services" target="_blank" rel="noreferrer noopener">written permission</a> 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 &#8220;aided and abetted&#8221; or was &#8220;knowingly concerned&#8221; of false or misleading conduct and representations by the advertisers.



The watchdog said the ads were likely to &#8220;mislead&#8221; 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 <a href="https://cms.blockworks.co/australian-billionaire-brings-criminal-case-against-facebook-over-fake-crypto-ads/" target="_blank" rel="noreferrer noopener">Andrew ‘Twiggy’ Forrest</a> brought criminal proceedings against Meta&#8217;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.



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“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.&#8220;</blockquote>



Sims added that those visits to landing pages from ads generated &#8220;substantial revenue&#8221; for Facebook.



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Australian Regulator Sues Meta Over ‘Scam’ Crypto Ads

<div id="highlights-block_61fb08e888489" class="highlights">
 <ul>
 <li>Andrew Forrest is bringing criminal proceedings against Facebook for using his image in crypto scam ads on the social media platform</li>
 <li>The billionaire said he was doing it for the people to shield them from future crypto scams by &#8220;criminal syndicates&#8221;</li>
 </ul>
 
</div>





Australian billionaire Andrew &#8216;Twiggy&#8217; Forrest has brought criminal proceedings against Facebook, alleging the company failed to prevent false cryptocurrency advertisements using his image on its platform.



The minerals mining magnate alleges Facebook, now Meta Platforms Inc., was &#8220;criminally reckless&#8221; for failing to take down the scam posts which have been ongoing since March 2019, according to a report by <a href="https://www.abc.net.au/news/2022-02-03/andrew-twiggy-forrest-launches-criminal-proceedings-facebook/100800630" target="_blank" rel="noreferrer noopener">ABC News</a> on Wednesday. Proceedings have been lodged in the Magistrates Court of Western Australia.



Forrest also alleges Facebook breached Australia&#8217;s money-laundering laws by doing little to stop the ads and that it &#8220;failed to create controls or a corporate culture to prevent its systems being used to commit crime.&#8221;



&#8220;I’m concerned about innocent Australians being scammed through clickbait advertising on social media,&#8221; Forrest said, as cited in the report. &#8220;I’m committed to ensuring that social media operators don’t allow their sites to be used by criminal syndicates.&#8221;



Charges have been made under Part 10 of the country&#8217;s Commonwealth Criminal Code with the blessing of the Attorney-General, per the report. 



&#8220;We take a multifaceted approach to stop these ads, we work not just to detect and reject the ads themselves but also block advertisers from our services and, in some cases, take court action to enforce our policies,&#8221; a spokesperson from Meta said in the report. &#8220;We&#8217;re committed to keeping these people [scammers] off our platform.&#8221;&nbsp;



It&#8217;s not the first time the social media giant has landed in hot water over crypto ad scams. In 2018, the issue reached a fever pitch, forcing Facebook to <a href="https://www.theguardian.com/technology/2018/jan/31/facebook-bans-ads-cryptocurrencies-scams" target="_blank" rel="noreferrer noopener">ban advertising</a> for anything related to the industry. At the time, the social media giant labeled the ads as being &#8220;frequently associated with misleading or deceptive promotional practices.&#8221; 



That decision was eventually overturned to only include initial coin offerings, according to its <a href="https://www.facebook.com/policies/ads/prohibited_content/prohibited_financial_products_and_services" target="_blank" rel="noreferrer noopener">advertising policies</a>. Some argue this change leaves more breathing room for scammers to exploit their victims, something, Forrest argues, Facebook has done little about.



&#8220;I want social media companies to use much more of their vast resources and billions of dollars in annual revenue to protect vulnerable people — the people who are targeted and fall victim to these horrible scams with their hard-earned savings,&#8221; said Forrest.



A hearing date has been set and will be held in the magistrate&#8217;s court on March 28.



Facebook parent company Meta Platforms&#8217; shares <a href="https://cms.blockworks.co/zuckerberg-still-confident-in-metaverse-plans-despite-stocks-20-slide/" target="_blank" rel="noreferrer noopener">fell 20% yesterday</a> following the release of its latest earnings report.



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Start your day with top crypto insights from David Canellis and Katherine Ross. <a href="https://blockworks.co/newsletter/empire">Subscribe to the Empire newsletter</a>.



Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. <a href="https://blockworks.co/newsletter/onthemargin">Subscribe to the Forward Guidance newsletter</a>.



Get alpha directly in your inbox with the <a href="https://blockworks.co/newsletter/research">0xResearch newsletter</a> — market highlights, charts, degen trade ideas, governance updates, and more.



The Lightspeed newsletter is all things Solana, in your inbox, every day. <a href="https://blockworks.co/newsletter/lightspeed">Subscribe to daily Solana news</a> from Jack Kubinec and Jeff Albus.