Australian regulator claims 58% of crypto ads on Facebook are scams

Over half of crypto ads on Facebook are either scams or violate Meta’s policies, according to Australia’s competition watchdog — citing preliminary research. 

In 2022, the Australian Competition and Consumer Commission (ACCC) took Facebook parent company Meta to court over allegations the company had “aided and abetted” celebrity crypto scam ads on Facebook. A hearing date has yet to be set.

In the latest filing to federal court , the ACCC claims that during its preliminary analysis of crypto advertisements on the platform, upward of 58% of those reviewed violated “Meta's Advertising Policies or, potentially, involved scams.”

The ads, which promote crypto investment scams , use the image of high-profile Australians, such as entrepreneur Dick Smith, billionaire former casino executive James Packer, Hollywood actors Chris Hemsworth, Mel Gibson, Nicole Kidman, Russell Crowe, and former politician Mike Baird.

No specific figure is mentioned for possible losses associated with these scams, but the Australian Government website Scamwatch shows that investment scams are still the most prominent way Aussies are losing money.

So far, in 2024, there have been 3,456 reports of investment scams, totaling over $78 million in losses. 

The ACCC says it identified 600 ads during its investigation. However, it is now focused on just 234 and claims it could find other instances of celebrity scams after the discovery process in the case.

In December of 2023, Billionaire Australian mining tycoon Andrew Forrest sued Meta over Facebook ads that used deep fakes  of his image to promote scam crypto schemes. It was originally thrown out, but a United States judge gave the case a green light to proceed in June.

At the same time, the regulator argues that since “at least January 2018, Meta has been aware that a significant proportion of cryptocurrency advertisements on the Facebook Platform have used misleading or deceptive promotional practices.”

Related: Celebrity crypto tokens will ‘absolutely’ catch SEC’s eye — Lawyers

“Advertisers are required to agree to certain contractual terms, which include compliance with Meta’s Advertising Policies. These policies prohibit advertisements which promote schemes using deceptive or misleading practices,” the ACCC said.

According to the Australia Watchdog, Meta does possess the “technical ability, or could have developed technology,” to place warnings on suspect ads, warning users they should exercise care when interacting.

It’s alleged that while Meta takes down individual ads once complaints are received and, on occasion, bans associated accounts, it continues to show and earn revenue from similar ads featuring the same celebrity or other public figures.

Meta claims in its safety center that it invests in “products and support systems to keep the scammers out” and deletes fake accounts.

Statista data estimates that in the fourth quarter of 2023, Facebook took action on 691 million fake accounts, down from 827 million in the previous quarter and the high of 2.2 billion fake profiles in 2019. 

Cointelegraph has contacted Meta for comment on the ACCC’s allegations.

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