Ripple and its CEO Brad Garlinghouse have faced many legal issues in recent months. This time around, they had taken YouTube to court alleging that the video publishing company had benefitted from fraudulent XRP giveaways.
But, Garlinghouse’s March 9 statement reveals that Ripple has ended the lawsuit against YouTube for the social media company’s alleged complicity in a spate of phony XRP giveaway scams.
Garlinghouse and Ripple had filed a lawsuit against YouTube LLC in April 2021, alleging that the platform had gained from these scams. The lawsuit also stated that YouTube had failed to exercise its administrative powers to stop these scams. Garlinghouse announced via Twitter:
“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.”
At the time, the scams relied heavily on spear-phishing attacks, where a victim’s account would be commandeered and its content erased. Then, the affected account would then get set up to appear like a prominent crypto figure, like Garlinghouse himself.
A phony XRP giveaway would then be unveiled soliciting between 5,000 and 1,000,000 XRP. The soliciting came with a promise that the alleged public figure would increase the users’ amounts five times which would then be returned to them.
Garlinghouse and Ripple claimed that YouTube knowingly benefitted from these scams as a result of its tendency to continue running adverts on the fraudulent videos. Ripple’s CEO suggested that progress was being made. But, he believes that social media companies need to lead the clean-up of their 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 about the nature of the settlement between YouTube and Ripple remain confidential. Garlinghouse noted that accountability was needed at a time when national governments were scrutinizing the crypto sector keenly.
Ripple is still under investigation by the US Securities and Exchange Commission for an alleged violation of the securities act. The SEC alleges that Ripple failed to properly register XRP before facilitating $1.38 billion worth of sales to investors.
