Australian regulator takes Meta to court over ‘deceptive’ crypto ads on Facebook

Australia’s competition regulator has highlighted that most of the cryptocurrency ads on Meta’s Facebook page are likely scams.

Meta was aware since 2018 that a significant portion of cryptocurrency-related advertising on Facebook was “misleading” or used “deceptive promotional practices,” according to a filing in the Federal Court of Australia by the Australian Competition and Consumer Commission.

In its preliminary analysis, the regulator found that over 58% of the crypto ads it examined were either scams or in breach of Meta’s Ads Policies. The ACCC has so far identified 600 ads promoting notorious scams.

These ads often use images of prominent figures and celebrities in Australia to mislead investors before scamming them through crypto investment scams. The dossier highlights several names, including political figures like Mike Baird, as well as actors Chris Hemsworth and Mel Gibson, whose likenesses are used in these fake ads.

For example, in February 2024, cybersecurity firm Cybertrace issued a warning that scammers were using deepfake videos of Australian mining tycoon and entrepreneur Andrew Forrest to promote a fake cryptocurrency trading app.

The ACCC added that it expected to find further examples of such scams once the discovery process began.

Additionally, the filing alleges that Meta has the authority to issue warnings on ads it displays to inform users about certain ads, but has failed to do so. Instead, it removes individual ads when it receives a complaint but continues to “earn revenue” from similar ads, sometimes featuring the same celebrity.

The regulator first took Meta to court in 2022 after it alleged the firm engaged in “deceptive conduct” by allowing fraudulent celebrity-themed crypto ads. Prior to that, the agency had begun investigating the tech giant for breaching Australian consumer law. As of now, no trial date has been confirmed.

Australia faces rise in crypto scams

Australia has witnessed a surge in scams as evidenced by Scamwatch data, with over 143,000 reported cases resulting in losses of $134.47, with investment scams resulting in losses of over $78 million.

The crypto sector in Australia has seen an increase in illicit activity, leading AUSTRAC to give cryptocurrencies a “high” risk factor in its 2024 Money Laundering National Risk Assessment. The Australian Financial Crimes Exchange’s 2023 report revealed that more than $3 billion was lost to crypto scammers in the previous year.

Authorities in the country have taken several steps in recent months to crack down on cryptocurrency-related scams. On August 5, the Australian Federal Police announced Operation Spincaster, in collaboration with blockchain forensics firm Chainalysis, to recover stolen cryptocurrencies from non-custodial wallets. Meanwhile, major banks in the country are restricting payments to crypto exchanges, citing a rise in crypto investment scams.