YouTube accused in crypto class action

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YouTube, everyone’s favourite ‘go-to’ place for music videos and much more, has been named as a defendant in a class action lawsuit against Bitconnect.

Silver Miller, the law firm leading the lawsuit, filed the complaint in January on behalf of six individuals. It states, according to Cointelegraph, “that crypto investment platform BitConnect issued crypto tokens that were unregistered securities, and obtained additional funds through a “wide-ranging Ponzi scheme.” The plaintiffs claim they lost $771,000 in total and allege that Bitconnect used funds from new investors to “meet the expectations of existing ones,” just as you would find in a pyramid scheme.

What’s the case against YouTube?

According to the court documents, Bitconnect posted several promotional videos on YouTube. Consequently, the videos were deemed to be “lure investors into fraudulent investment scheme.” It is also stated that YouTube failed to remove the videos or demonetise them, exposing “countless” users to the allegedly illegal investments.

Cointelegraph reports, “YouTube posted more than 70,000 hours of unedited content, which generated 58,000,000 views,” and says the court documents state that Bitconnect affiliates’ videos “greatly exceeded the threshold numbers for the “enhanced” eligibility standards.”

YouTube had been warned about the fraudulent nature of Bitconnect by a number of users and the lawsuit claims that if “YouTube had conducted an appropriate search of its databases, it would have delisted the harmful BitConnect videos.” Instead, it allegedly accepted even more videos.

The court document finished by saying, “YouTube failed as a gatekeeper to protect its users from, and warn its users of, the very harm YouTube set out to prevent with its advertising protocols and proprietary algorithms.”

David Silver, of Silver Miller added: “This case is not about YouTube being the speaker or publisher of the content on its website. Instead, liability is predicated on YouTube’s failure to act after learning from content directly published on YouTube of the readily foreseeable harm posed by its advertising partners… As the old saying goes: Sometimes when you lie down with dogs, you get fleas.”

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