Ripple and its CEO Brad Garlinghouse had alleged that YouTube profited monetarily from fraudulent XRP giveaways.
Ripple has ended its lawsuit against YouTube for the social media platform’s alleged complicity in a spate of fake XRP giveaway scams, CEO Brad Garlinghouse announced on March 9.
Ripple and Garlinghouse filed a lawsuit against YouTube LLC in April 2020, claiming that the platform itself had profited from the fraudulent activity, and that it had failed to exercise its administrative powers to stop it. Garlinghouse announced on Twitter on March 9:
“Last year, @Ripple and I sued @YouTube for failing to enforce its own policies by allowing fake accounts (impersonating my/Ripple’s verified accounts) to conduct XRP giveaway scams. We’ve now come to a resolution to work together to prevent, detect and take down these scams.”
The scams relied on spear-phishing attacks, where a user’s account would be commandeered and its content erased. The account would then be set up to look like a prominent cryptocurrency figure, such as Garlinghouse himself. A fake XRP giveaway would then be launched, which solicited sums between 5,000 and 1,000,000 XRP from users on the promise that five times the original amount would be returned to them.
Ripple and Garlinghouse alleged that YouTube knowingly profited from such scams due to its tendency to continue to run advertisements on the fraudulent videos in question.
Garlinghouse suggested progress was being made, but that social media sites still had a responsibility to lead the clean-up of their own platforms. Garlinghouse wrote:
“Social platforms are starting to acknowledge their role in allowing crypto scams to persist and recognize the need to be part of the solution. Some like @xrpforensics are helping detect/track stolen funds, but platforms need to lead the charge or it’s still just whack-a-mole.”
Details regarding the nature of the settlement between Ripple and YouTube remain confidential, said Garlinghouse, who noted that accountability was required at a time when national governments were examining the cryptocurrency space more closely.
Ripple remains under investigation by the United States Securities and Exchange Commission for an alleged violation of the securities act. The SEC claims Ripple failed to properly register XRP prior to facilitating $1.38 billion worth of sales to investors.