Australian mining magnate Dr. Andrew Forrest has launched criminal and civil actions against Facebook, now called Meta. He accused the social network giant of being “criminally reckless” and knowingly profiting from illegal scam advertisements that used his image.
Though the criminal case will be heard in Australia, it is reportedly the first time the company has faced such an action anywhere in the world. Unlike a civil suit, which can be settled out of court with details undisclosed, a criminal case would deliver a public verdict in court.
The ads in question target naive potential digital asset investors with fake “testimonials” from Forrest and other celebrities, promising riches in digital currency returns if users send them money. Victims of the scam never receive anything, and have paid millions of dollars into the scams since they first started appearing in 2019.
Dr. Forrest, a notable philanthropist and the billionaire board chairman at Fortescue Metals, has cited one case where an individual lost US$670,000 from a fake ad featuring his image and a fake testimonial. He launched one criminal action to be heard in the Magistrate’s Court of Western Australia (his home state) starting March 28, 2022, and a separate civil case in California where Facebook’s parent company Meta has its headquarters.
Forrest said he took the actions after previously asking Facebook to remove the scam advertisements in 2019, via an open letter to Mark Zuckerberg. Facebook commented that the fake ads violated its policies, and it removed them when it became aware of them.
Facebook “knowingly profits from this cycle of illegal ads,” his lawsuit claims.
However, anyone who’s used Facebook for any length of time (an ever-dwindling number of people) can attest that such ads still pop up in timeline feeds every now and then. Those inexperienced in digital assets often take to Twitter or ask friends if the ads are real, indicating that the general public is still mostly unaware of the difference between “real” blockchain investment schemes, and outright scams.
In response to Dr. Forrest’s actions, Facebook put out a general statement claiming it works to remove any bogus ads and scams from its platform.
A criminal action could do more than a civil suit to force Facebook/Meta into making its advertising policies stricter. Facebook had previously banned most—if not all—digital asset-related ads from its platform for several years, before easing restrictions following advocacy from Bitcoin and blockchain proponents.
In 2018, it announced it would begin creating its own digital asset, a USD-backed “stablecoin” initially called Libra and later Diem. However, the project faced strong resistance from U.S. and European Union lawmakers and regulators, and never came close to actually launching before the company abandoned the project altogether in January 2022.
Within days of ditching the Diem project, Meta announced it would join COPA, the Crypto Open Patent Alliance formed by Square (now named “Block”) CEO Jack Dorsey, Coinbase, Blockstream, MicroStrategy and Kraken.
Most of those names are united by their support for BTC and opposition to BSV—in particular, Bitcoin creator Dr. Craig S. Wright. Though COPA promotes itself as a non-profit industry group committed to keeping blockchain-related intellectual property open, its only action in its 16 months of existence has been to launch a legal challenge to Dr. Wright’s copyright claim over the 2008 Bitcoin white paper. Dorsey has also expressed support for, and started a legal defense fund, for any open source centralized blockchain protocol developer facing legal action. The fund’s announcement specifically referred to Dr. Wright.
Now, one of COPA’s high profile members could find itself facing criminal charges of profiting from crypto scams—which is definitely not a good look.
Despite lofty claims of wanting BTC to be the “currency of the internet” and of freeing economies, today’s social media and payments giants (including exchanges) instead have a track record of failing to protect their users from scams, and of acting to build walled-garden economies they control, more than to promote open ones.
Follow CoinGeek’s Crypto Crime Cartel series, which delves into the stream of groups—a from BitMEX to Binance, Bitcoin.com, Blockstream, ShapeShift, Coinbase, Ripple, Ethereum,
FTX and Tether—who have co-opted the digital asset revolution and turned the industry into a minefield for naïve (and even experienced) players in the market.
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