Wozniak sues YouTube

Wozniak lawsuit tells YouTube: Be more like Twitter on bitcoin giveaway scams

Citing Twitter’s fast response to a huge and humiliating hack the Apple co-founder accused YouTube of deliberately allowing the fraudulent ads to remain online for profit

Steve Wozniak wants YouTube to follow Twitter when it comes to cracking down on bitcoin giveaway scams.

Noting Twitter’s rapid response to the high-profile June 15 hack of 130 accounts of celebrities, tech leaders, and politicians, the Apple co-founder and legendary tech investor announced on July 23 he was suing YouTube over its failure to police these fraudulent ads.

Wozniak’s lawsuit said (or rather, screamed): “In stark contrast, for months now, Defendant YOUTUBE has been unapologetically hostingpromoting, and directly profiting from similar scams. YOUTUBE has featured a steady stream of scam videos and promotions that falsely use images and videos of Plaintiff STEVE WOZNIAK, and other famous tech entrepreneurs, and that have defrauded YOUTUBE users out of millions of dollars.” 

YouTube and parent company Google have not only resisted taking the scam ads down, they promoted and participated in the fraud by selling the crooks running them targeted advertising, the suit alleges. Giveaway ads typically feature someone famous offering to send back double the amount of crypto the mark sends in.

“If YouTube had acted quickly to stop this to a reasonable extent, we would not be here now,” The Woz said in a release. “YouTube, like Google, seems to rely on algorithms and no special effort requiring custom software employed quickly in these cases of criminal activity. If a crime is being committed, you MUST be able to reach humans capable of stopping it. What human would see posts like these and not ban them as criminal immediately?”

Real damage

One answer to that question is his 17 co-defendants, who all lost money to these schemes. 

Their losses varied widely, from 0.0005 BTC to more than 5 BTC

The suit alleges plaintiff Alex Naray lost five bitcoins on May 11 while watching a livestreamed video about the bitcoin halving. 

“YouTube recommended to Naray the above-referenced ‘live’ scam video for a bitcoin giveaway,” the suit said. “The YouTube promotion included the image and likeness of wealthy financial celebrity and bitcoin enthusiast Robert Kiyosaki, with whom Naray was familiar. 

“When Naray clicked to open the YouTube-recommended video, YouTube incorrectly indicated that the scam video was ‘live,’ was currently being watched by more than 100,000 users, and had a substantial number of ‘likes’ from YouTube users. This along with other false and misleading information provided by YouTube to promote the bitcoin giveaway led Naray to believe that the video was what it purported to be. Naray sent 5.0 bitcoin according to instructions provided in the bitcoin giveaway video. Naray has been unable to recover any of that bitcoin.”

Not alone

YouTube responded to a request for comment on the suit with the exact same one-sentence response it gave on April 21, when Ripple CEO Brad Garlinghouse filed a nearly identical suit.

That was: We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation.”

Wozniak’s complaint also alleges that YouTube is capable of snuffing out these scams far more quickly than it does. Noting that YouTube has “robust and sophisticated tools to regulate content on its platform,” the suit claims that the streaming video site “regularly touts these capabilities and highlights its ability to use these tools to detect misleading and fraudulent scams.”

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Leo Jakobson, Modern Consensus editor-in-chief, is a New York-based journalist who has traveled the world writing about incentive travel. He has also covered consumer and employee engagement, small business, the East Coast side of the Internet boom and bust, and New York City crime, nightlife, and politics. Disclosure: Jakobson has put some 401k money into Grayscale Bitcoin Trust.