Profit from fraudulent XRP giveaways: Ripple drops lawsuit against YouTube
Ripple and its CEO Brad Garlinghouse alleged that YouTube profited financially from fraudulent XRP giveaways.
Ripple has dropped its lawsuit against YouTube over the social media platform’s alleged aiding and Crypto Engine abetting in several fraudulent XRP giveaways, CEO Brad Garlinghouse announced on 9 March.
Ripple and Garlinghouse filed a lawsuit against YouTube LLC in April 2020, alleging that the platform benefited from the fraudulent activities and failed to step in and stop them as part of its management powers. Garlinghouse announced on Twitter on 9 March:
„Last year @Ripple and I sued @YouTube for failing to enforce their own policies. They allowed fake accounts (posing as verified accounts of me/Ripple) to distribute fraudulent XRP giveaways. We have now agreed to work together to prevent, detect and eliminate these scams.“
The scams involved so-called spear phishing attacks, where a user’s account is hacked and its contents deleted. The account was then set up to look like that of a cryptocurrency celebrity, such as Garlinghouse is. A fake XRP giveaway was then distributed, asking users to deposit amounts between 5,000 and 1,000,000 XRP. In exchange, they were promised that they would receive five times the original amount back.
Ripple and Garlinghouse claimed that YouTube knowingly profited from such scams
Indeed, the company continued to run ads on the fraudulent videos in question.
Garlinghouse pointed out that progress was being made. But social media sites still have a responsibility to keep their own platforms clean, he said. Garlinghouse wrote in response:
„Social platforms are beginning to recognise the role they play in crypto fraud. They are also seeing the need to become part of the solution. Some people, such as @xrpforensics, are helping to track down/trace stolen money, but the platforms need to get involved, otherwise it’s still just blind bashing.“
No details are being made public about the nature of the settlement between Ripple and YouTube, Garlinghouse said. He noted that accountability is needed, especially now that governments are looking more closely at the cryptocurrency space.
Ripple remains under investigation by the US Securities and Exchange Commission (SEC) for an alleged violation of securities laws. The SEC alleges that Ripple failed to properly register the XRP before the platform sold US$1.38 billion worth of tokens to investors.