According to the Australian Competition and Consumer Commission (ACCC), Meta has been aware since 2018 that a substantial number of cryptocurrency-related advertisements on Facebook were not what they seemed. These ads, which often employ deceptive promotional practices, have reportedly been misleading users into falling prey to various scams. In a filing with the Federal Court of Australia, the ACCC highlighted that over 58% of the crypto ads it reviewed were either scams or in direct violation of Meta’s Advertising Policies. This finding paints a grim picture of the state of digital advertising on one of the world’s largest social media platforms.
The ads in question frequently use images of well-known Australian celebrities and public figures to create a false sense of legitimacy. Names such as actors Chris Hemsworth and Mel Gibson, along with political figures like former New South Wales Premier Mike Baird, have been used without their consent in these fraudulent schemes. The ads typically lure unsuspecting investors into crypto scams, promising high returns but ultimately leaving them with empty wallets.
An interesting example came to light in February 2024 when cybersecurity firm Cybertrace issued a warning about scammers using deep fake videos of Australian mining tycoon Andrew Forrest. The videos were employed to promote a fake crypto trading app, tricking people into investing in a product that didn’t exist.
Meta’s Alleged Inaction
The ACCC’s filing goes beyond just exposing the prevalence of these scams; it also raises serious questions about Meta’s response to the issue. The regulator alleges that Meta has the capability to issue warnings on ads displayed on its platform, specifically to inform users that certain advertisements may be misleading or fraudulent. However, despite this ability, Meta has reportedly chosen not to do so.
Instead, Meta has taken a reactive approach, removing individual ads only after receiving complaints from users or authorities. Yet, the ACCC claims that Meta continues to earn revenue from similar ads, sometimes featuring the same celebrities, even after the problematic ads have been flagged. This has led to accusations that Meta prioritises profit over user safety, a charge that the company will likely have to address in court.
The ACCC initially took Meta to court in 2022, accusing the tech giant of engaging in “deceptive conduct” by allowing scam celebrity-themed crypto ads to proliferate on its platform. The regulator’s investigation into Meta’s practices has been ongoing since then, with no clear resolution in sight. As of now, a hearing date for the case has not been confirmed, leaving both Meta and the Australian public in a state of limbo.
The Surge of Crypto Scams in Australia
Unfortunately, the issue of misleading crypto ads is just one part of a much larger problem in Australia. The country has seen a significant surge in scams, particularly those related to cryptocurrency investments. According to data from Scamwatch, there have been over 143,000 reported cases of scams, resulting in losses totaling $134.47 million. Investment scams alone have accounted for more than $78 million of these losses, highlighting the scale of the problem.
The rise in crypto-related scams has also caught the attention of AUSTRAC, Australia’s financial intelligence agency. In its 2024 Money Laundering National Risk Assessment, AUSTRAC assigned cryptocurrencies a “high” risk factor due to the increasing illicit activities associated with them. A report from the Australian Financial Crimes Exchange in 2023 further revealed that over $3 billion was lost to crypto scammers in the previous year, underscoring the urgency of addressing this issue.
Australia’s Response: A Battle Against Scammers
In response to the growing threat, Australian authorities have been stepping up their efforts to combat crypto scams. On August 5, 2024, the Australian Federal Police launched Operation Spincaster, a collaboration with blockchain forensic firm Chainalysis, aimed at recovering crypto funds stolen from non-custodial wallets. This operation represents just one of many initiatives that the government is taking to protect its citizens from falling victim to online fraud.
At the same time, major banks in Australia have begun restricting payments to crypto exchanges, citing the surge in investment scams as a key reason for their actions. While these measures may be seen as necessary to curb the rising tide of fraud, they also raise concerns about the future of cryptocurrency in Australia and the potential for legitimate businesses and investors to be caught in the crossfire.
Conclusion: A Need for Greater Accountability?
As the battle against crypto scams continues, one thing is clear: more needs to be done to protect the public from falling prey to these schemes. The ACCC’s case against Meta could set a crucial precedent for how social media platforms are held accountable for the content they host, especially when it comes to advertisements that have the potential to cause significant harm.
