Over half of crypto ads on Facebook are scams or violate policies, claims regulator

The Australian Competition and Consumer Commission (ACCC) has found in an analysis that 58% of all cryptocurrency ads on Facebook are either outright deep fake crypto scams, or at least break Meta’s advertising policies, a court has heard.

A court case has been ongoing since 2022 when the ACCC took action against Meta over celebrity scam ads. The regulator alleged that Meta was engaging in false, misleading, or deceptive conduct by publishing the ads, and aiding and abetting the false conduct by the advertisers.

According to a ruling that was issued by Australian courts last week, the ACC alleges that “Meta has been aware that a significant proportion of cryptocurrency advertisements on the Facebook platform have used misleading or deceptive promotional practices,” since at least January 2018.

A huge part of the scams undertaken by these ads is the false inclusion of celebrity endorsement. Movie stars such as Nicole Kidman and Mel Gibson, musicians such as Chris Brown, and sports stars such as Daniel Ricciardo, as well as many others, have had their likenesses used fraudulently in these crypto scams.

The use of deepfaked likenesses of celebrities and public figures is not a new phenomenon, but it is increasing in severity. Prime Minister of the UK, Kier Starmer was recently used as a deepfake in crypto scam videos. Elon Musk’s likeness has also been used to promote crypto scams.

The crux of the ACCC’s lawsuit is that while Meta frequently acts on reports and removes scam or policy-violating ads after a complaint has been received, they aren’t doing enough on a systemic level and continue to display and earn money from ads of a similar nature.

The ACCC alleges that Meta “has had the technical ability, or could have developed technology – which could place a warning on advertisements to the effect that users should exercise care as advertisements on the Facebook platform have falsely suggested that the public figure concerned endorses a money-making scheme or a trading scheme – but has not given such warnings.”

Speaking to The Guardian, a spokesperson for Meta said “Scammers use every platform available to them and constantly adapt to evade enforcement. Meta doesn’t want scams on its platforms and we will continue to work tirelessly to prevent them and protect our users.”

This is a serious issue and continues to increase as a problem. Research recently showed that projected losses due to deepfake crypto scams are likely to exceed $25 billion in 2024 alone.

Featured image credit: generated by Ideogram

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