On July 3rd, 2018, court documents have been filed in a class action lawsuit against Bitconnect. The news is that YouTube has been added as a defendant in that case. The case was originally filed on January 24, by six individuals who are represented by a law firm Silver Miller. It is claimed that BitConnect engaged in a Ponzi Scheme and other illegal activities such as issuing crypto tokens which were unregistered securities. This has resulted in a loss of $771,000 for the claimants. It is alleged that Bitconnect siphoned funds from new investors to pay off the existing investors.
The court documents show that Bitconnect and its affiliated partners have posted numerous promotional videos on YouTube that are designed to lure unsuspecting new investors in the fraudulent investment scheme. The claimant accused that YouTube failed to remove these published videos that have affected numerous YouTube users and their investments.
Awareness of the scam:
It is reported that the top ten Bitconnect affiliates in YouTube have posted nearly 700,000 hours of promotional content generating 58,000,000 views. According to the document, the promoter’s videos gained more views than the threshold numbers for eligibility standards. Many users have notified YouTube regarding the fraudulent activities conducted by Bitconnect using titles like
“How Bitconnect scam works – in great detail”, “Bitconnect Scam explained by Craig Grant” and others.
David Silver, head of Silver Miller wrote an email that
This case is not about YouTube being the publisher or promoter of the content on its platform. Instead, YouTube is liable because of its failure to act after getting information that the content published on YouTube posed significant harm to its advertising partners. There is an old saying – Sometimes when you lie with the dogs, you get the fleas”.
The claimants say that YouTube should have done a background check after getting the complaints and it should have delisted the inappropriate Bitconnect videos. But the inaction of YouTube has led to massive fraud on the investor community. Google LLC is also referred, which changed its financial products policy to ban all advertisements related to cryptocurrency and its associated content. This is due to the potential harm for Google product users including YouTube.
The document concludes that YouTube, even with its proprietary algorithms and advertising protocols failed in its duty to act as gatekeepers of inappropriate information and failed to protect users from harm.