Australian Regulator Reports 58% of Crypto Advertisements on Facebook Are Scams

The Australian Competition and Consumer Commission (ACCC) has highlighted troubling findings, indicating that a significant portion of cryptocurrency advertisements on Facebook may be fraudulent or in violation of Meta’s advertising policies.

Key Findings

• Over 58% of analyzed crypto ads either breached Meta’s policies or could be considered scams.
• The ACCC has initiated legal proceedings against Meta regarding misleading advertisements.
• High-profile Australian figures have been impersonated in many of these fraudulent advertisements.

Legal Proceedings and Investigations

In 2022, the ACCC filed a lawsuit against Meta, the parent company of Facebook, claiming that the platform had facilitated deceptive advertisements featuring prominent individuals in the cryptocurrency space. The subsequent court hearing is yet to be scheduled.

In a recent court filing, the ACCC disclosed that their preliminary analysis revealed that more than half of the crypto ads reviewed failed to comply with Meta’s advertising guidelines. In particular, many of these ads promoted schemes linked to cryptocurrency investments.

Investment Scams Targeting Australians

Scams utilizing the likeness of celebrated Australians, including entrepreneur Dick Smith and entertainers like Chris Hemsworth and Nicole Kidman, have been reported widely. As per the Australian Government’s Scamwatch service, investment scams remain the primary method through which Australians are losing money.

In 2024 alone, over 3,400 reports of investment scams have emerged, resulting in losses exceeding $78 million.

Ongoing Investigations

The ACCC evaluated around 600 advertisements during its investigation. It has narrowed its focus to 234 potentially deceptive ads and anticipates uncovering additional celebrity-related scams as the case develops.

In a separate incident, Australian billionaire Andrew Forrest initiated a lawsuit against Meta after discovering that scam ads used deepfakes of his image. While the case was initially dismissed, a recent ruling allowed it to proceed, indicating ongoing concerns about how platforms manage misleading advertisements.

Meta’s Responsibility and Response

The ACCC asserts that Meta has been aware of the prevalence of misleading advertisements since at least January 2018. Advertisers are mandated to comply with Meta’s policies, which prohibit deceptive promotional practices.

Furthermore, the ACCC contends that Meta possesses the technological capabilities to flag suspicious ads and alert users about potential risks associated with them. Although Meta removes individual ads upon receiving complaints, the commission argues that similar ads continue to run, often generating revenue for the platform.

A report by Statista indicates that Meta took action against 691 million fake accounts in the last quarter of 2023, down from 827 million in the previous quarter, highlighting the ongoing challenges Meta faces in combating fraudulent activity on its platform.

The ACCC’s findings underscore significant concerns regarding the effectiveness of current measures to protect users from crypto-related scams on social media platforms.