Ripple Sues YouTube for Allowing 'Scams' That Promise Free XRP

Ripple Labs and CEO Brad Garlinghouse are suing YouTube over allegations the video streaming giant has failed to police its platform against fake XRP giveaway scams, resulting in monetary damage to users and reputational harm to Ripple.

Ripple's lawsuit centers around "XRP Giveaway" scams that rely on hijacked accounts and other means to fool victims into believing that if they send some amount of XRP they will receive a greater amount in return, the filing alleges. Similar scams with other cryptocurrencies have long existed on Twitter and other platforms.

In a series of tweets, Garlinghouse said YouTube was the "epicenter" of these scams, though he said other platforms like Instagram were also responsible.

"Across the industry, social media companies have failed to police their platforms from being abused by the entirely preventable imposter giveaway scams. Hundreds of people (including some of you) have been hurt, yet big tech continues to drag their feet," he said.

According to the suit, Ripple alleges the scammers have successfully defrauded "millions of XRP valued at hundreds of thousands of dollars" out of victims. It cited at least one instance where a scammer apparently received $15,000 in XRP from a victim.

"Ripple has repeatedly demanded that YouTube take action to stop the Scam and prevent further harm. Yet YouTube refuses, even where the same scheme is replicated time and again on its platform. YouTube’s response has been woefully inadequate and incomplete. As a result, Ripple and Mr. Garlinghouse continue to suffer substantial reputational harm," the suit said.

Ripple sent at least 25 takedown notices against accounts promoting such giveaways, but YouTube failed to act promptly, the suit alleges.

Among the allegations, Ripple says the Google subsidiary assists the scammers disseminate ads, and profits off of this revenue: "YouTube, after it was informed about the Scam on countless occasions, sold and helped the scammers disseminate advertisements—so-called “video discovery ads”—to get more YouTube visitors to view and click on videos perpetuating the Scam."

The suit asks a federal court to compel YouTube to shut down any alleged scams which use Ripple's registered trademarks to promote such giveaways, to be more proactive in shutting down future alleged scams, to stop verifying any such alleged scams, and for damages, restitution, costs and interest.

"The Court should compel YouTube to fulfill its legal obligations, to discontinue its policy of willful inaction, and to prevent further irreparable harm to Ripple’s brand and Mr. Garlinghouse’s reputation, which, in turn, will prevent further financial injury to the individuals who are duped by the Scam. Absent a court order obligating YouTube to act, the Scam will undoubtedly continue to flourish and create countless more victims," the suit said.

Ripple did not immediately respond to a request for comment. A YouTube spokesperson told CoinDesk "We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation" in an emailed statement.

Read the full suit below:

UPDATE (April 21, 2020, 23:11 UTC): This article has been updated with a comment from YouTube.