Apple co-founder Steve Wozniak has sued YouTube over the proliferation of "bitcoin giveaway" scam videos on the YouTube platform. The videos falsely use the names of Wozniak and other celebrities—including Elon Musk, Bill Gates, and Ethereum founder Vitalik Buterin—to give the scams legitimacy.
Scammers hijack popular YouTube accounts and change their names so that they appear to be the official accounts of celebrities like Wozniak or companies like Apple. They then broadcast a "live" video showing old footage of the celebrity discussing cryptocurrency or related topics. Alongside the footage is text claiming that if someone sends bitcoin to a particular address, the celebrity would send back double the amount.
Along with Wozniak, the plaintiffs include more than a dozen individuals who were taken in by the scam, losing bitcoins worth anywhere from a few dollars to more than $40,000. In total, cryptocurrency scams like this have cost victims millions of dollars.
"We take abuse of our platform seriously, and take action quickly when we detect violations of our policies, such as scams or impersonation," a YouTube spokesperson told Ars by email. YouTube says that in the first quarter of 2020, the company removed 2.2 million videos and disabled 1.7 million accounts for "spam, scams, deceptive practices."
But the plaintiffs argue that YouTube isn't doing nearly enough to stamp out these cryptocurrency scams. Wozniak's wife, Janet, says that she has contacted YouTube numerous times since May about the scams. The plaintiffs point out that YouTube has sophisticated tools for identifying objectionable activity. Yet they don't seem to be taking even obvious steps like filtering out videos that use terms like "bitcoin giveaway."
The lawsuit also points to the example of Twitter, which had been plagued by these kinds of scams in the past but has taken steps to stamp them out in recent years. The plaintiffs argue that the Twitter crackdown pushed scammers to YouTube, where they have thrived for the last couple of years.
YouTube has a powerful defense
Ultimately, it may not matter how much YouTube has done to stamp out these videos. That's because Section 230 of the Communications Decency Act provides online platforms with broad immunity for user-submitted content. Sites have immunity even if they do little or nothing to combat objectionable content posted by users.
Anticipating this defense, the plaintiffs try to distinguish their lawsuit from run-of-the-mill Section 230 cases. But it's not obvious those arguments will be successful. For example, Woz's lawyers argue that the scam videos are "blatant criminal conduct that is not even arguably protected by the First Amendment." That might be true, but it isn't likely to save the lawsuit. After all, the courts have upheld Section 230 immunity even in cases where users were distributing child pornography.
The plaintiffs argue that YouTube did more than passively host the videos. YouTube's recommendation algorithms promoted the videos to cryptocurrency enthusiasts and sold ads against the videos—directly profiting from the scams. But that could also be a hard sell; courts have repeatedly held that sites enjoy Section 230 protections even when they deliberately promote problematic third-party content.
But while Woz's lawsuit is on shaky ground legally, it could still be significant in the court of public opinion. Being sued by one of Silicon Valley's most beloved figures could pressure YouTube into taking the problem of cryptocurrency scams more seriously.
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