Court documents filed on July 3rd show that YouTube has been added as a defendant in a class action lawsuit against BitConnect.
The lawsuit was initially filed on January, 24 by six individuals represent by law firm Silver Miller. The claimants state that crypto investment platform BitConnect issued crypto tokens that were unregistered securities, and obtained additional funds through a “wide-ranging Ponzi scheme.”
BitConnect and its associated parties uploaded a number of promotional videos on YouTube, which were marked inappropriate as the material allegedly lured potential investors to a fraudulent investment scheme. YouTube is said to have failed to de-list and demonetize the published videos, which exposed countless YouTube users to harmful videos and illegally-promoted investments.
The document says that the number of views of several of the affiliate promoters’ videos greatly exceeded the threshold numbers for the “enhanced” eligibility standards. The top ten BitConnect affiliates on YouTube reportedly posted more than 70,000 hours of unedited content, which generated 58,000,000 views.
US crypto lawyer David Silver said:
“This case is not about YouTube being the speaker or publisher of the content on its website. Instead, liability is predicated on YouTube’s failure to act after learning from content directly published on YouTube of the readily foreseeable harm posed by its advertising partners… As the old saying goes: Sometimes when you lie down with dogs, you get fleas.”
A significant number of users notified YouTube of fraudulent activity by BitConnect, posting videos with titles such as “How bitconnect scam works in great detail,” He added:
“YouTube failed as a gatekeeper to protect its users from, and warn its users of, the very harm YouTube set out to prevent with its advertising protocols and proprietary algorithms.”