After six months of fighting to get YouTube to shut down giveaway scams using Ripple’s name to steal hundreds of thousands of dollars in XRP, the international payments firm and CEO Brad Garlinghouse sued the social media giant today.
In a series of tweets launched at 1:35 p.m. today, Garlinghouse said “social media companies have failed to police their platforms from being abused by the entirely preventable imposter giveaway scams. Hundreds of people (including some of you) have been hurt, yet big tech continues to drag their feet.”
Calling YouTube unresponsive and “the epicenter for imposter scams,” Garlinghouse added, “YouTube’s inertia is indicative of an industry-wide problem of a lack of accountability. Victims are forced to jump through hoops to report these scams, and oftentimes that doesn’t even work.”
Still, it’s not just Google’s YouTube. In his April 21 tweets, Garlinghouse specifically pointed to a Jan. 4 tweet he made calling out Facebook-owned Instagram for refusing to take down “bradxrp,” a site claiming to be him.
In the lawsuit (No. 3:20-cv-02747) filed on April 21 in the U.S. District Court for the Northern District of California court, Garlinghouse and Ripple accuse YouTube of having “profited from the Scam by aiding and abetting the scammers.” Notably by selling ads.
YouTube did not respond to a request for comment by press time. YouTube later responded to a very detailed question, including the docket number of the Garlinghouse/Ripple lawsuit and a link to the full filing on Ripple’s website, with the following enlightening statement from a spokesperson: “We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation.”
Of course, that policy is at the heart of Garlinghouse and Ripple’s complaint:
Five to one
It should be noted that the lawsuit’s use of “the Scam” refers to many different hacks of YouTube channels. Some are ads, some are channels set up for that purpose, and some of the most effective target the owners of popular channels with spear-phishing attacks to gain access. These channels are then rebranded with images, logos, and videos of Ripple and Garlinghouse.
In one instance, a scam website instructed viewers to send between 5,000 and 1 million XRP $9.20-$1,840 at press time) to an address, and promised they would get five times that amount back immediately.
Even more outrageous, the suit alleges that YouTube formally verified one of the Scam’s stolen channels.
In doing so, “YouTube communicated to hundreds of thousands of viewers and subscribers that the hacked account was ‘the official channel of a creator, artist, company, or public figure.’ This was completely false and profoundly harmful.”
This refers to the MarcoStyle account, with about 361,000 subscribers. After a Nov. 3, 2019 hack, the name was changed to “Edwinsyah” and featured a picture of Garlinghouse. This one channel stole $15,000 worth of XRP before being shut down, the suit said.
Not so slow on the takedown
YouTube can certainly be quick when taking down crypto-focused websites, even ones that are very legitimate. The most recent example was Tone Vays—no fan of Ripple.
On April 16, his entire channel, with more than 92,000 subscribers, was taken down just one hour after an initial warning over a price analysis video titled, “Market Pulse – Huge Rise in Bitcoin, What About $SPX?” and 30 minutes after his appeal, Vays tweeted.
He’s far from the first.
Beginning on Dec. 23 last year, more than two dozen cryptocurrency YouTube channels were taken down in a Christmas purge that the social media site called an “error” four days later.
Among the first was Chris Dunn a partner at NextGen Venture Partners, whose 10-year-old Chris Dunn TV channel, with 211,000 subscribers, was taken down for several days. He called on cryptocurrency content creators to leave YouTube for a decentralized video hosting platform.
Disclosure: Modern Consensus founder Ken Kurson sits on the board of Ripple.
Updated on April 21, 2020, at 11:39 p.m. to add YouTube comments and update several image credits.