Facebook sues developer behind ‘cloaked’ digital currency, COVID-19 scams

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Facebook is used to making appearances in court, but usually on the receiving, not the sending, side of the table. This time, though, it is the plaintiff as the social media giant goes after a software developer out of Bangkok.

Basant Gajjar reportedly developed and distributed software that allowed unscrupulous companies to bypass Facebook advertising controls and “cloak” their real propaganda, rendering those controls useless. Now, Facebook wants him to be held accountable, and the companies panning fraudulent cryptocurrency and other scams brought to justice.

Everything from deceptive diet pill ads to coronavirus cures to scamming digital currency investments was allowed to sneak in under Facebook’s radar since 2016. Gajjar was reportedly offering his solution under the company name LeadCloak, and targeted Facebook, WordPress, Shopify, Google and more. By superficially presenting an ad for one product, which was approved for publishing, LeadCloak would then proceed to allow the underlying scamming product to be seen once the user clicked on an ad link.

Facebook posted about the lawsuit on its website on April 9, with its director of platform enforcement and litigation, Jessica Romero, explaining, “Cloaking is a malicious technique that impairs ad review systems by concealing the nature of the website linked to an ad. When ads are cloaked, a company’s ad review system may see a website showing an innocuous product such as a sweater, but a user will see a different website, promoting deceptive products and services which, in many cases, are not allowed. In this case, Leadcloak’s software was used to conceal websites featuring scams related to COVID-19, cryptocurrency, pharmaceuticals, diet pills, and fake news pages. Some of these cloaked websites also included images of celebrities.”

Despite the company having received reports about the misleading ads over the years, it was never able to take legal action until now. It has proceeded to disrupt LeadCloak’s services by disabling the app, as well as accounts that Facebook determined had taken advantage of the software. The company continues to work at identifying other customers that may have used the app, and will take “additional enforcement actions” against them.

The lawsuit was filed in the U.S. District Court for the Northern District of California. Gajjar, who is reportedly from India, will most likely be just the first to face litigious action on the part of Facebook. There are plenty of similar apps and software solutions out there just like LeadCloak, and Mark Zuckerberg and the rest of the team will undoubtedly start looking at how to go after all of them.