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YouTube asks court to dismiss crypto giveaway scam lawsuit filed by Ripple

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Video platform giant YouTube has asked a U.S. federal court to dismiss a lawsuit filed against it by distributed ledger startup Ripple.

Ripple and its CEO, Brad Garlinghouse, sued YouTube in April and alleged that the Google-owned platform failed to stop scammers from posting fraudulent crypto giveaway videos that used Garlinghouse's likeness. At the time, the company asserted that "Ripple and Mr. Garlinghouse have suffered—and continue to suffer—irreparable harm to their public image, brand, and reputation as a direct consequence of YouTube’s deliberate and inexplicable failure to address a pervasive and injurious fraud occurring on its platform." A crypto giveaway scam involves enticing would-be victims to send their cryptocurrency to an account under the belief that they will receive additional funds in return. 

For its part, YouTube said in a statement in April that "[w]e take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation."

On July 20, YouTube responded with a motion to dismiss. According to public records, the heart of YouTube's argument against Ripple's claims is that it is not liable for the content on its site and that, if and when notified about harmful content, it has historically moved to remove it. YouTube cited Section 230 of the U.S. Communications Decency Act, which effectively provides a liability shield for sites against the content that are posted on them.

"Plaintiffs have sued YouTube for allegedly failing to do enough to prevent third-party fraudsters from hijacking various YouTube user accounts and perpetrating a crypto-currency scam through those stolen accounts. YouTube did not orchestrate or participate in that scam, and after being notified about fraudulent content posted by the hijacked accounts, YouTube removed it. Plaintiffs’ state-law claims are barred by Section 230 of the CDA, 47 U.S.C. § 230 (“Section 230”), and all their claims fail of their own accord."

YouTube later wrote that "Plaintiffs acknowledge that YouTube’s Community Guidelines prohibit frauds and deceptions like this...and the Complaint makes clear that when Plaintiffs (or their agents) flagged instances of scam content, or of hijacked accounts that were perpetrating the scam, YouTube consistently removed that material. But Plaintiffs believe that YouTube, on occasion, did not respond fast enough to Plaintiffs’ complaints and that YouTube should have done more on its own to find and remove scam content that Plaintiffs had not specifically brought to YouTube’s attention."

According to Court Listener, a motion hearing is set for August 27. 

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