AltcoinsBusiness & Finance

Facebook to Face Another Lawsuit Over its Crypto Ads

Dutch billionaire John De Mol has filed a lawsuit against Facebook because of crypto ads on Facebook that have been using his picture without permission. He claims in the lawsuit that consumers who participated in those campaigns have lost more than 1.9 million USD and that his reputation has also seen a big hit.

John De Mol, a media mogul and a billionaire worth over 1.7 billion dollars, has been a victim of these ads in the past as well. The media mogul had been reporting these ads since late 2018. The ads had been using Mol’s image to endorse fake cryptocurrencies that were encouraging users to send cash to buy bitcoin.

The images and the ads suggested that Mol, an established businessman, was a part of the project. The ads have since been removed from Facebook; however, the lawsuit argues that the ads shouldn’t have been allowed on the platform at all. The lawyers representing Mol have asked the court to order Facebook to fix its broken ads scrutiny system.

READ ALSO: GlobalCoin in Dire Straits: Facebook’s 2.38 Billion Aging Userbase is Not Crypto Friendly

Facebook’s Role

This is not the first-time crypto ads have caused issues for Facebook as illegal crypto ads have been a headache for Facebook for quite some time now, and despite the company’s continuous efforts, the problem persists. The lawyers at Facebook have been persistent that the company has been doing everything in its power to stop such incidents from taking place; however, they did say that it is impossible for Facebook to monitor all the ads uploaded on its platform all the time.

Facebook’s lawyers have also said that the company has met with the Dutch financial regulations authority to discuss all measures that would help prevent anything like this from happening again. The lawyers admitted that advertisers can trick Facebook’s software-based vetting process by changing links in their ads to disguise their content. This disguised content passes Facebook’s automated checking system undetected; however, Facebook employees have assured that the company is doing everything in its power to ensure that such incidents can be minimized. A manager at Facebook in an interview to Reuters said:

The people who push these kinds of ads are persistent, they are well-funded, and they are continually evolving their deceptive tactics to get around our systems.

READ ALSO: Facebook Made a ‘Crypto Move’ in Switzerland Putting Rumors to Rest

Facebook’s Recurring Problem with Crypto Ads

This is not the first time Facebook has come under fire because of cryptocurrency ads that have defrauded innocent investors. Facebook in 2018 banned all cryptocurrency ads from the platform to combat any misleading promotional activities that may cause harm to Facebook’s users. The ban included a promotional ban for Initial Coin Offerings (ICOs) and cryptocurrencies. Managing director at Facebook Rob Leathern explained the decision in a blog post:

We want people to continue to discover and learn about new products and services through Facebook ads without fear of scams or deception. That said, many companies are advertising binary options, ICOs, and cryptocurrencies that are not currently operating in good faith.

However, after the ban was put in place in January 2018, Facebook lifted some part of the ban in June of the same year. The company then allowed some crypto ads to run on the platform, but only from sources that had been vetted before and came out as clean and legitimate. The ban on the promotion of ICOs was still not lifted and the company revised the ban stating:

Starting June 26, we’ll be updating our policy to allow ads that promote cryptocurrency and related content from pre-approved advertisers. But we’ll continue to prohibit ads that promote binary options and initial coin offerings.

This new case suggests, the policy of banning crypto ads has not worked for Facebook as the company still saw a surge in crypto related frauds through the social network. However, the company has recently announced that they would again be lowering restrictions on their crypto ads ban. Facebook shared the update in a blog post, announcing that it is has decided to update its advertising policies and lower restrictions on crypto and blockchain advertising. The post read:

We’ve listened to feedback and assessed the policy’s effectiveness. While we will still require people to apply to run ads promoting cryptocurrency, starting today, we will narrow this policy to no longer require pre-approval for ads related to blockchain technology, industry news, education or events related to cryptocurrency.

The change in the policy may have been as a result of Facebook’s plan to launch its stablecoin, called “GlobalCoin“. The company expects to launch its cryptocurrency this year.

READ ALSO: 3 Ways in Which Blockchain Will Take Facebook Out of Its Miseries and Save Zuckerberg

Shahzaib Zafar

Electrical Engineer, Crypto enthusiast, a tech nerd and a developer with a keen interest in blockchain, writes daily articles about bitcoin and cryptocurrencies for blockpublisher.

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