Ripple rejects YouTube arguments

Ripple: YouTube ‘setting aside common sense’ as it tries to throw out lawsuit

The video-sharing site is accused of being ‘willfully blind’ when it comes to giveaway scam videos, as the payments firm rejects YouTube’s attempts to get the suit dismissed

Ripple has furiously rejected YouTube’s attempts to dismiss a lawsuit over giveaway scams—alleging that the video-sharing site is “setting aside common sense” in trying to defend itself.

The international payments firm took legal action against Google-owned YouTube in April. At the time, Ripple’s CEO Brad Garlinghouse said his team had spent six months unsuccessfully trying to get the social media giant to shut down videos using Ripple logos and Garlinghouse’s likeness that aimed to steal hundreds of thousands of dollars in XRP from unsuspecting users.

Fighting back

Filing its opposition to the motion to dismiss in papers submitted to the U.S. District Court for the Northern District of California on Sept. 8, Ripple challenged YouTube’s three main arguments.

First, Ripple railed against the notion that YouTube lacked knowledge of the “widespread and pervasive scam” occurring on its platform, calling it “willfully blind:”

“This ignores more than 350 takedown notices (and counting) sent to YouTube by Ripple. YouTube routinely failed to respond to these notices at all. When YouTube did respond, it typically did so only weeks or even months later.”

Second, the payments firm asked the court to reject YouTube’s attempts to “cloak itself” in immunity by using Section 230 as a defense. This part of the 1996 Communications Decency Act states that “interactive computer services” cannot be treated as the publisher of third-party content, shielding them from lawsuits if users post something illegal.

Ripple claimed YouTube was trying to transform the limited protections offered by this law into “an all-encompassing get-out-of-jail-free card”—and said it should not apply because the video-sharing site “developed content for the scam by ‘verifying’ hacked accounts and then profiting from it.”

And third, the company accused YouTube’s legal team of misunderstanding the allegations it is making. The court filing continued:

“YouTube’s claim that it did not ‘use’ Ripple’s protected trademarks or Mr. Garlinghouse’s likeness is not credible: YouTube verified hacked accounts and sold ads that infringed on Ripple’s marks and misappropriated Mr. Garlinghouse’s name and image. In the process, YouTube ‘used’ Mr. Garlinghouse’s likeness and directly participated in the fraud.”

The strongly worded court document alleges that YouTube failed to act on warnings from mainstream media outlets and the site’s users, as well as Ripple.

It describes how Forbes ran an article in November 2019 entitled “A YouTuber With 350,000 Subscribers Was Hacked, YouTube Verified His Hacker.” The report details how MarcoStyle had all of his videos taken down, with his profile changed to the name “Brad Garlinghouse.” Forbes reported how the hacker ran a livestream to scam viewers out of money, pocketing an estimated $15,000. Marco reported the hack to YouTube on the day it happened, but claimed the matter was only resolved a week later.

In another case, the filing claims a YouTube user encountered a channel that also featured Ripple’s logo and used Garlinghouse’s name and image. Although this user immediately alerted YouTube, the company allegedly failed to take action quickly—and the next day, one of the videos had been viewed 85,000 times. Ripple appears to be using these incidents to reinforce its own narrative:

“In many cases, due to YouTube’s inaction, Ripple was compelled to send multiple takedown notices to YouTube for the same content… At the time the Complaint was filed, new instances of the scam continued to appear nearly every day, often amassing tens of thousands of views in a matter of hours.”

To conclude, a lawyer representing Ripple added: “For the foregoing reasons, YouTube’s motion to dismiss should be denied in full. Each of Ripple’s three claims is viable and should proceed to discovery.”

What’s next?

The court now has to weigh up the merits of Ripple’s and YouTube’s arguments. Back in July, when it asked for the lawsuit to be dismissed, the video-sharing site maintained it was itself a victim of the scam, did not knowingly engage in the fraudulent videos or copyright infringement, and cannot be held responsible for third-party content—even if it allowed paid ads to run on the videos in question.

But unfortunately for YouTube, these lawsuits do appear to be piling up. As reported by Modern Consensus in July, Apple co-founder Steve Wozniak has also taken the company to court—this time for failing to police Bitcoin giveaway scams. In his lawsuit, he said YouTube was “unapologetically hosting, promoting, and directly profiting” from these videos.

In a release at the time, he said: “If YouTube had acted quickly to stop this to a reasonable extent, we would not be here now… 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?”

(Disclosure: Modern Consensus founder Ken Kurson sits on the board of Ripple.)

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Connor Sephton is a journalist with an interest in cryptocurrencies, personal finance, and financial inclusion—as well as the challenges the crypto industry faces in achieving mainstream adoption. He owns cryptocurrencies.