BitConnect Class Action: YouTube Added as Defendant
by: The Knowledge GroupJuly 10, 2018
YouTube isn’t properly vetting material added to its databases, claims a new class action suit filing. YouTube’s name was recently added as a defendant in an existing lawsuit against the crypto assets company BitConnect.
Harmful YouTube videos from BitConnect impacted numerous people. Six of them, represented by the Silver Miller law firm, originally filed suit in January in the Southern District of Florida. One victim lost $200,000.
The plaintiffs assert that BitConnect issued unregistered securities (tokens) and operated a Ponzi scheme. BitConnect encouraged people to buy the company’s coin (BCC) and informed the buyers that the return on their investments could reach up to 40% per month. The victims claim losses of $771,000 combined and allege that BitConnect used their new investors’ money to issue payments to their earlier ones.
Netizens Sound the Alarm
By the time cease and desist orders arrived at BitConnect from the securities regulators in Texas and North Carolina and promoters started taking down the harmful material, concerned YouTube viewers had already managed to make copies of the evidence.
Several of these alert people notified YouTube of BitConnect’s use of unethical means to post massive volumes of audio-visual material through a multitude of affiliates, and of the harmful nature of these uploaded promotions. YouTube did not act to prevent the foreseeable harm as viewers were lured in by the materials posted by BitConnect advertisers, despite YouTube’s algorithms and advertising limits.
Google Under Scrutiny
The lawsuit castigates YouTube’s parent corporation, Google, for its part in this financial fiasco. The search engine giant has seen fit to adopt a policy against crypto advertising — to prevent exactly this type of conduct.
Notably, the states’ cease and desist letters only targeted the lending and exchange functions of BitConnect. They did not challenge the Bitconnect X (BCCX) coin offering, which observers call just as dangerous.
U.S. federal law protects investors by compelling the registration of securities before they can be sold. The SEC regards as securities those tokens or initial coin offerings that tout potential profits based on others’ entrepreneurship or management.
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