YouTube accused of negligence as part of BitConnect fraud lawsuit
After investors began warning of questionable practices at the company, cryptocurrency exchange BitConnect shut its doors permanently in January. The move led to a number of lawsuits, including one out of Florida that was given class-action status in June. In the lawsuit, BitConnect isn't the only target - investors are also going after Google-owned YouTube.
The investors claim that YouTube was negligent in its responsibilities, allowing a great deal of content by BitConnect, including promotional videos by the platform's affiliates and supporters. They argue that YouTube should have done more to control the traffic, pointing out that the affiliates "published over 70,000 hours of unedited content, generating 58,000,000 views and luring hundreds if not hundreds of thousands of victims."
The lawsuit further states, "By enacting policies designed to prevent bad actors (such as those soliciting investments in fraudulent Ponzi schemes) from disseminating harmful, offensive or inappropriate content through its platform, YOUTUBE owed, by its own assumption, Plaintiffs and the Class a duty to reasonable care to prevent such content from harming its users."
BitConnect has been accused of being nothing more than a Ponzi scheme. Its own digital currency, the BCC, dropped from $463 to $10 when it closed and is now worth virtually nothing at $0.50. When the company closed, it said it would reimburse investors at a rate of $363.52 using its own digital currency. However, as the price had dropped substantially, the investors were still out significant amounts, with BitConnect potentially retaining a minimum of $100 of every coin sold - 261,333 in total.