“XRP giveaway” scams have been showing up around the internet from time to time. Now Ripple is determined to fight for the reputation of its brand.
The company said “enough is enough” yesterday, when it announced the start of legal actions against video-sharing giant Youtube. Ripple Labs Inc. and its CEO Bradley Garlinghouse allege YouTube for its “deliberate and inexplicable failure to address a pervasive and injurious fraud occurring on its platform”.
Furthermore, Mr Garlinghouse even called Youtube the epicenter of these scams in his series of tweets:
The American tech company claims that scam videos under the name of “XRP giveaway” often relied upon hacked YouTube accounts and caused damage both to the company’s reputation and XRP holders. As stated in the complaint document, the plaintiffs repeatedly demanded YouTube take actions and remove scam videos, however, their call was not heard.
According to Ripple’s blog post, the current move is directed to prompt an industry wide-behavior change and set the expectation of accountability.
XRP giveaway scam
The post on the company’s blog says Ripple is resolute to protect consumers around the world from dangerous online giveaway scams and false impersonations across well-known platforms such as YouTube, Twitter, or Facebook.
“Giveaway scam” is an industry term that relates to attempts to defraud money from various people via social media impersonation. The scammers convince victims to send them their money in order to get more funds in return. These scams impersonate individuals and companies and are often spread through fake social media accounts.
In Ripple’s case, the scope of the harm is vast. The company claims that “XRP giveaway” scam replicated many times by numerous unidentified scammers “has defrauded victims out of millions of XRP valued at hundreds of thousands of dollars.”
Accusations on Youtube
The lawsuit discloses the possibly ambiguous behavior of the world’s most popular video-sharing platform YouTube.
The plaintiffs claim they have repeatedly addressed YouTube to remove fraudulent videos, however, the platform has constantly refused to stop them. According to them, YouTube is regularly touting its tools and resources for self-regulating content published on the platform. However in Ripple’s case, YouTube ignored or otherwise failed to address many of these takedown demands, the document says.
The company claims it has submitted 49 takedown demands to Youtube, that relate directly to the scam. An additional 305 takedown demands were filed against accounts and channels impersonating Brad Garlinghouse.
The plaintiffs allege that irreparable harm has already been done to both Ripple’s brand and Brad Garlinghouse’s reputation.
Furthermore, both Ripple Labs and Brad Garlinghouse allege YouTube of refusing to stop scam as the platform has profited from the Scam by aiding and abetting the scammers.
Despite numerous demands from plaintiffs, YouTube chose to sell and help scammers publish advertisements, the so-called “video discovery ads” to get more visitors to view and click on the scam. According to the document:
Every such video posted on YouTube generates revenue by providing a vehicle through which YouTube can deliver Scam ads on behalf of the scammers. YouTube maintains its business by maximizing advertising revenue.
The video-sharing platform generates $15 billion in annual revenue. YouTube is one of the internet’s largest publishers, whose primary source of income comes from selling ads to third parties. According to plaintiffs, YouTube “is capable of identifying, flagging, and removing fraudulent content, including content similar to the kinds of videos at issue in the Scam.”
The plaintiffs aim for the award of damages, including compensatory, statutory, and punitive damages. They also seek restitution for victims equal to the enrichment YouTube gained while allowing scam videos.