Australian regulator sues Meta over ‘scam’ celebrity crypto Ads

By: Benson Toti
Benson Toti
Benson is a News Reporter at Invezz handling breaking news, interviews and market analysis. He made his first investment… read more.
on Mar 18, 2022
  • The ACCC says the legal proceedings are against Meta for allowing "fake" celebrity crypto ads on Facebook.
  • Meta allegedly abetted the scams by failing to take steps against the misleading ads despite knowledge of it.
  • The regulator seeks injuctions, penalties and costs against Meta Platforms, Inc.

Australia’s competitions regulator has sued Facebook-parent Meta over allegations of aiding and abetting a scam involving celebrity crypto adverts.

According to the Australian Competition and Consumer Commission (ACCC), the social media giant’s conduct breached Australian laws.

Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.

The regulator’s Federal Court proceedings allege that Meta promoted “false and misleading’ information by publishing the ads on its Facebook platform.

The deceptive conduct, the ACCC noted on Friday, went against guidelines stipulated in the Australian Consumer Law (ACL) or the Australian Securities and Investments Commission Act (ASIC Act). 

In its case against Meta, the ACCC alleges that the company allowed ads that appeared to promote investment in crypto or other money-making schemes. The advertisements, the watchdog noted, also misled consumers into believing that the project had the support of prominent Australian figures.

Among top personalities cited as being featured in the “scams” were well-known businessman Dick Smith, and TV presenter David Koch.

The ads contained links which took Facebook users to a fake media article that included quotes attributed to the public figure featured in the ad endorsing a cryptocurrency or money-making scheme,” the regulator said.

Users convinced by these schemes ended up depositing funds into accounts controlled by scammers, ACCC added.

But despite having knowledge and the tools to take action against the crypto ad scams, Meta reportedly failed to take the necessary steps to stop them.

The essence of our case is that Meta is responsible for these ads that it publishes on its platform,” said ACCC Chair Rod Sims.

The watchdog cited a case where one consumer reportedly lost over $650,000 to scammers. Notably, this is after the victim fell for the false promise of getting an investment opportunity.

According to ACCC’s Sims, this is just one example of the shocking and disgraceful effects of the schemes. In its suit, the regulator seeks “declarations, injunctions, penalties, costs and other orders.”

Invest in crypto, stocks, ETFs & more in minutes with our preferred broker, Capital.com
9.3/10
75.26% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.