Facebook Faces Criminal Case From Australian Billionaire Over Scam Cryptocurrency Ads

Australian billionaire Andrew Forrest filed a criminal case against Facebook, alleging that the social media giant failed to prevent the circulation of fraudulent cryptocurrency ads that featured his image, a move that comes as legislative efforts in Australia attempt to chip away the safe harbor protections offered to social media companies.

Andrew Forrest speaks to the media during a press conference at Rugby WA HQ in Perth, Australia.

Key Facts

Forrest—the billionaire founder and chairman of mining giant Fortescue Metals—alleges that Facebook breached Australia’s anti-money laundering laws for failing to act against cryptocurrency scam ads on its platform featuring celebrities, including himself, the Sydney Morning Herald reported.

Forrest’s suit alleges that Facebook failed to implement proper systems or a culture that would prevent the use of the social platform to carry out such scams.

The billionaire and his legal team said they believe that this would be the first time Facebook would face a criminal charge anywhere in the world, however, the company did face a criminal investigation in the U.S. back in 2019 for its data handling practices.

The Magistrates Court of Western Australia will begin hearing the case from March 29 and if Facebook is found guilty it could face fines and be forced to change its handling of third party advertising.

The report adds that Forrest has also filed a civil suit against Facebook in California, where the company is headquartered.

According to Forbes’ real time tracker, Forrest’s current net worth stands at $18.2 billion.

Big Number

A$940,000 ($670,000). That’s the amount of money one victim of the scam in Australia allegedly lost because of a fake endorsement featuring Forrest, the lawsuit alleges, according to The Australian.

Crucial Quote

In a statement released to the media, Forrest said: “This action is being taken on behalf of those everyday Australians – mums and dads, grans and grandads – who work all their lives to gather their savings and to ensure those savings aren’t swindled away by scammers. I’m acting here for Australians, but this is happening all over the world.”

Key Background

In 2019, Forrest publicly criticized Facebook for allowing cryptocurrency scams to proliferate and shared a letter it had sent to the social media giant’s leadership team. In it, Forrest warned that innocent people were losing their life savings after being misled by scam crypto investment ads that falsely used his endorsement and images. The billionaire’s lawsuit could be more bad news for the company which faces a string of controversies and regulatory investigations across the world. While Facebook could claim safe harbor protections—that ensure that they are not liable for content posted by their users—it is unclear how effective such a strategy might be as Australia attempts to wind down some of those protections. Last year, Australian Prime Minister Scott Morrison warned that he was prepared to make companies like Facebook and Twitter liable for defamatory comments posted by their users.

Further Reading