Key points
- Facebook adds Andrew Forrest to the list of things to worry about
- Fortescue Metals chair is taking the US company to court over its alleged involvement in cryptocurrency scams using Forrest's name
- The first hearing is slated for March in Australia
Facebook is in hot water again, this time for allegedly funnelling users to cryptocurrency scams.
Australian businessman and Fortescue Metals Group Limited (ASX: FMG) chair Andrew Forrest is bringing criminal charges against Facebook, alleging the social media giant used his name to defraud unsuspecting victims.
This is just the latest in a series of troubles for Facebook, now known as Meta Platforms Inc (NASDAQ: FB).
Adding insult to injury, the Meta share price took a 22% dive this morning after its fourth-quarter results failed to live up to expectations.
Ironically, the charges being filed by Dr Forrest come mere days after Meta's digital currency project, Diem, begins to wind down.
Another cryptocurrency pain for social media giant
Twiggy's Facebook lawsuit is the latest in a string of cryptocurrency scandals to hit Facebook. Earlier this year, Facebook shut down its digital currency project Diem (previously known as Libra) after it failed to gain regulatory approval.
However, the charges being fronted by Forrest concern the company's alleged lack of oversight. The Fortescue founder goes as far as to accuse the tech giant of aiding and abetting in the misuse of his reputation.
While Andrew Forrest is the one pursuing charges, he is not the only prominent figure used in the cryptocurrency ruse. Other publicly popular people whose images were used in these scams included Chris Hemsworth, Waleed Aly, and David Koch.
According to court documents filed in California, one individual incurred a $952,000 loss after falling victim to the scam. Furthermore, it is explained the total amount of money siphoned off is unclear. Although, it is believed to be in the millions.
Forrest shared the reasoning behind the legal action, stating:
I'm doing this on behalf of innocent Australians who don't have the resources to take on companies like Facebook… The same people who are being scammed and many of whom have seen me falsely featured on Facebook advertisements
I want social media companies to use more of their vast resources and billions of dollars in annual revenue to protect vulnerable people who are targeted and fall victim to these scams.
What's next?
According to reports, Andrew Forrest has filed two separate proceedings against Facebook/Meta over the cryptocurrency scams. One of these went to the West Australian Magistrates Court, comprising of alleged Australian money-laundering breaches. This case is expected to be heard in March.
Meanwhile, the other lawsuit — involving alleged aiding and abetting of fraud — has been filed with a California court. At this stage, a date has not been set for this civil case.
In response to the allegations, a Facebook spokesperson said:
We don't want ads seeking to scam people out of money or mislead people on Facebook – they violate our policies and are not good for our community.
In December, the Australia Competition and Consumer Commission (ACCC) revealed more than $109 million in reported losses through cryptocurrency scams. However, the true figure is believed to be far higher.
