Apple Co-Founder Loses Lawsuit Against YouTube Over Crypto Giveaway Scams

Steve Wozniak has lost his lawsuit against YouTube over scammers using his image to push crypto giveaway scams on the streaming platform.

The case touches on the responsibility of social media companies to police content posted by users. But, in a ruling made yesterday, a California state judge said YouTube and its parent company, Google LLC, are protected by federal law from such responsibility.

Earlier this year, Ripple CEO Brad Garlinghouse opted to settle with YouTube over a similar episode.

Wozniak Argues YouTube Directly Benefited From Crypto Scams

Crypto giveaway scams refer to tricksters pretending to be well-known figures appealing for crypto donations. In return, the sender is led to believe they will receive multiples back on their original donation.

It takes common sense to spot the scams. However, as Input Output Global CEO Charles Hoskinson alluded to recently, common sense is lacking in the world.

Hoskinson has also suffered from scammers using his image. Victims who’ve lost money often reach out to him for help, by which time there’s little anyone can do.

On that, Hoskinson vented his frustrations, saying he will never give away free ADA. He appealed to people’s common sense, saying nothing is for free.

“I continue getting emails about giveaway scams- usually from the victims. Again I WILL NEVER GIVE AWAY FREE ADA. IF YOU SEND ADA, THEN YOU WILL LOSE IT!!! I keep saying it and people’s commonsense, greed and nativity set it. You don’t get something for nothing. Stop doing it.”

Under Section 230 of the Communications Decency Act, online intermediaries that host or republish speech are protected against laws that could otherwise be used to hold them legally responsible for what others say and do on their platform.

Nonetheless, Wozniak argued that this doesn’t apply in his case as YouTube failed to remove fraudulent videos, “materially contributed” to the scam by selling ads driving traffic to the videos, and falsely verified YouTube channels that hosted giveaways, hence added to their believability.

Judge Sunil R. Kulkarnia said Wozniak’s arguments do not surmount the immunity provided by Section 230. He now has 30 days with which to amend his complaint.

Garlinghouse Settles For Undisclosed Terms

In March 2021, Ripple settled its lawsuit with YouTube on allegations the social media giant failed to stop scammers from impersonating CEO Brad Garlinghouse.

Ripple argued that this caused irreparable damage to its image, brand, and reputation. All as a direct result of YouTube’s failure to take down the channels and videos running the giveaway scams.

In a series of tweets, Garlinghouse said YouTube didn’t follow its own policies by allowing fake and hacked accounts to perpetuate the scams.

Although all parties have now come to a settlement, Garlinghouse said action at this level is still just playing “whack-a-mole.” Meaning, channel takedowns don’t solve the problem.

While specific settlement terms are confidential here, it’s clear to all that without accountability and action, trust erodes in this industry, at a crucial time when govts around the world are looking closely at crypto.”

The pseudo-anonymity of cryptocurrency and relatively lax punishments for crypto fraud only encourage scammers. Garlinghouse is correct in calling for appropriate top-down measures against the problem.

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